The B.C. government is requiring all British Columbians who live in an area with the speculation and vacancy tax to opt out of the tax.
The provincial government announced on Tuesday that all people who own residential property in the taxable areas will receive a letter with clear instructions for how to complete a declaration and register an exemption.
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“By completing the declaration and registering to claim an exemption, British Columbians will help identify speculators and empty homes, allowing the government to crack down on speculation and make housing more affordable,” reads a press release from the provincial government.
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“Over 99 per cent of British Columbians will be exempt, but owners must register to claim their exemption.”
The government provided no details on how much it will cost to administer the tax and how much British Columbians who shouldn’t have to pay the tax will be required to pay if they do not return the form on time.
If you own only one home and are a British Columbian you are exempt from the tax.
“Please note that if your property has more than one owner, even if the other owner is your spouse, a separate declaration must be made for each owner,” reads the government’s website.
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The province says the goal of the tax is to target foreign and domestic speculators who own homes in B.C. but do not pay tax here.
The government also hopes the tax will turn empty homes into housing for people and raise revenue that will go to supporting affordable housing.
The speculation tax has been criticized by mayors in Kelowna, Langford and West Kelowna for hurting the local housing market. The tax was brought in as a crucial part of the B.C. government’s housing affordability plan.
Former West Kelowna mayor Doug Findlater took to Twitter on Tuesday night to express concerns about the way the NDP is setting up the tax.
“It is insane and will result in an administrative nightmare. Many folks with just treat it as junk mail. Then they may get a huge assessment,” Findlater wrote.
British Columbian homeowners will be required to provide date of birth and social insurance number, are required to complete the declaration and claim an exemption from the tax by March 31, 2019.
WATCH: Dec. 27, 2018 — BC Liberals worried speculation tax won’t lead to more housing supply
The tax includes all municipalities within the Capital Regional District excluding Salt Spring Island, Juan de Fuca Electoral Area and the Southern Gulf Islands. It also includes municipalities within the Metro Vancouver Regional District, excluding Bowen Island and the Village of Lions Bay.
The other taxable communities are Abbotsford, Mission, Chilliwack, Kelowna, West Kelowna, Nanaimo and Lantzville.
Starting in 2019, the the speculation and vacancy tax rate will vary, depending on your residency and where you pay income tax. Foreign owners and satellite owners will pay 2 per cent on assessed value of a residential property. A satellite family is an individual or spousal unit where the majority of their total worldwide income for the year is not reported on a Canadian tax return.
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British Columbians with multiple homes that are not rented out for more than six months of the and other Canadian citizens or permanent residents will pay a tax of 0.5 per cent.
Exemptions include owners who are disabled, if the property was just inherited, if it’s valued under $150,000, or a person is away and has left the home vacant due to medical reasons, residential care, work or spousal separation.
The deadline to declare is March 31, 2019. Residential property owners who do not complete their declaration before April 1, 2019, will receive a tax notice of assessment. Owners whose property is not exempt from the tax have until July 2, 2019, to pay their assessed tax.