Dear editor:
We came across this letter to the editor in the North Shore News regarding BC’s new speculation and vacancy tax and wanted to offer some clarifications. Of the two examples cited, partial or full exemptions may in fact apply.
Example 1: A person lives in Victoria but works in Vancouver three days a week. They have a condo in both cities.
Spouses who live apart for work reasons are eligible for principal residence exemption on an additional home provided that:
One principal residence is at least 100 km closer to the workplace than the distance between the other principal residence and the workplace; or
One principal residence is on Vancouver Island and the other residence is not on Vancouver Island
If the same owner owns both properties, their second property is not exempt. However, B.C. owners are eligible for a tax credit of up to $2,000 on secondary properties to offset their tax payable. The credit is limited to $2,000 per owner and $2,000 per property (in the case of multiple owners) per year (the equivalent tax on a property with $400,000 in value).
Example 2: Parents have two adult children with families. They have purchased homes for their children that they have retained in their own name.
The situation described above is an example of a non-at-arm’s-length tenancy because the owner has a pre-existing relationship with the tenant and therefore deals with them at an advantage to someone searching for rentals on the market. While foreign owners and members of satellite families (families with high worldwide income who pay little local tax) must meet additional requirements in order for this kind of tenancy to grant them an exemption from the speculation and vacancy tax, the same is not true for Canadian citizens or permanent residents who are not satellite families.
If the tenant is a non-arm's-length tenant, and the owners are Canadian citizens or permanent residents of Canada but not satellite families, a rental exemption may apply if:
The tenant has the permission of an owner to live there, and
It is where the tenant lives most of the time each month
For more details about exemptions and this tax, you can visit www.gov.bc.ca/spectax or call the toll-free speculation tax line: 1-833-554-2323.
Bowinn Ma, MLA
North Vancouver Lonsdale
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