The new budget announced by the BC government included a number of new taxes that will apply to BC properties and property transfers. The first announcements included a possible speculation tax on non-BC resident owned properties. Little details of the speculation tax have been announced but it is intended to capture property owners who do not earn income and primarily reside within BC. The intention appears to be to capture those that leave their homes vacant for the majority of the year while living out of country or out of province. The taxes will be levied at 0.5 per cent of a home’s assessed value for the 2018 tax year and will increases to 2.0 per cent in 2019. The government has announced that most homeowners will be exempt from the speculation tax. Those who primarily reside in their home, rent out their home or pay income taxes in BC will be exempt from the speculation tax. The most important factors regarding the speculation tax will be the possible exemptions to the taxes haven’t yet been announced.
The government has also announced an expansion of the foreign buyer tax that was implemented by the previous Liberal Government. The previous tax was set at 15% of the sale price of any property purchased by a foreign buyer in the greater Vancouver area. The new tax will be increased to 20% of the purchase price and broadens its application to the major population centres in BC including the Nanaimo region, greater Victoria and several areas of the Okanagan. The additional property tax will not have to be paid by foreign buyers if the sale completes before or on May 18, 2018 and the contract of purchase and sale is dated on or before February 20, 2018.