Our focus was on which pockets of Greater Vancouver have strong sales. We looked at data during the most active selling months (Sept – Oct 2018 and Feb – Mar 2019) and analyzed areas with the highest sales-to-active listings ratio, a handy benchmark that compares the buyer demand against the supply and shows us the rate at which properties are selling. If an area has a sales-to-active listings ratio greater than 20%, it typically indicates a seller’s market.
So you’re ready to buy a new home. But as everyone knows, it’s not a simple process. There are a lot of moving pieces, including staying on top of your finances and finding the right kind of home and neighbourhood for you and/or your family.
What are the most useful apps and tools out there for prospective home buyers? Let’s take a look!
Thank you, everyone, for coming out to our family movie night. Your support and referrals are the reason why we are able to do these events for you all throughout the year. Until the next one…Cheers!
What is the speculation and vacancy tax?
The speculation and vacancy tax is an annual tax paid by some owners of residential properties in designated taxable regions of B.C.
The tax is designed to discourage housing speculation and people from leaving homes vacant in B.C.’s major urban centres. More than 99% of British Columbians are expected to be exempt from the tax.
All residential property owners in the taxable regions must complete a declaration, even if they’re eligible for an exemption.
Note: The speculation and vacancy tax is distinct from the empty homes tax in the City of Vancouver.
Where does the speculation and vacancy tax apply?
Your residential property might be taxable if it’s located in one of these geographic areas:
- Municipalities within the Capital Regional District. This excludes Salt Spring Island, Juan de Fuca Electoral Area and the Southern Gulf Islands
- Municipalities within the Metro Vancouver Regional District, excluding Bowen Island, the Village of Lions Bay and Electoral area A, but including UBC and the University Endowment Lands
- The City of Abbotsford
- The District of Mission
- The City of Chilliwack
- The City of Kelowna
- The City of West Kelowna
- The City of Nanaimo
- The District of Lantzville
Reserve lands, treaty lands and lands of self-governing Indigenous Nations are not part of the taxable regions.
Islands that are accessible only by air or water are not part of the taxable regions.
Some residential properties are excluded from the speculation and vacancy tax, even though they are located within a taxable region. These include residential properties owned by:
- An Indigenous Nation
- Municipalities, regional districts, governments and other public bodies
- Registered charities
- Housing co-ops
- Certain not-for-profit organizations
If you’re not sure if your residential property is in a taxable region, contact us to find out:
Toll Free: 1 (833) 554-2323
Outside North America: 1 (604) 660-2421
How much is the speculation and vacancy tax if my residential property isn’t exempt?
For properties owned on December 31, 2018, the tax rate is the same for everyone: 0.5% of the assessed value of your residential property on July 1, 2018, as determined by BC Assessment. 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.
For 2019 and onwards, the speculation and vacancy tax rate will vary, depending on your residency and where you pay income tax:
- 2% for foreign owners and satellite families
- 0.5% for British Columbians and other Canadian citizens or permanent residents who are not members of a satellite family
The speculation and vacancy tax applies based on ownership as of December 31 each year.
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.
If a residential property has multiple owners, tax is divided among each owner based on their ownership share. For example, if you and your spouse are equal owners of a residential property in a taxable region, you’ll each owe tax on 50% of the home’s assessed value.
A corporation, trustee or partner will pay tax at the highest rate that would be applicable to any of the corporate interest holders, beneficial owners or partnership interest holders if they held the residential property individually.
If my home is in a designated taxable region, will I have to pay the speculation and vacancy tax?
For 2018, most British Columbians will be exempt if they either live in their home as their principal residence or rent out their property for at least three months of the year. Short-term rentals for periods of less than one month do not count towards the three-month total.
For 2019 and onwards, over 99% of British Columbians will continue to be exempt. A home that is not a principal residence must be rented for at least six months per year to be exempt from the speculation and vacancy tax. Short-term rentals for periods of less than one month do not count towards the six-month total.
What other exemptions could I be eligible for?
You may be eligible for other exemptions, even if your residential property isn’t your principal residence and you don’t rent it out for the minimum number of months per year.
If you’re not exempt, you’ll receive a tax notice with the amount you owe.
Review the full list of exemptions and exclusions.
Exemptions are based on how each person uses each residential property. If you’re the co-owner of a residential property in a taxable region and are exempt, but the other owner isn’t exempt, the other owner will have to pay tax based on their percentage ownership of the residential property as listed with the Land Title Office.
What if the owner is a corporation, trustee or partner?
Many of the exemptions available to individuals are also available to corporations, trustees or partners that own residential property.
If you’re not eligible for an exemption, you may qualify for a tax credit.
B.C. owners – B.C. owners are eligible for a tax credit of up to $2,000 on a secondary property. This means an owner of a home assessed at up to $400,000, who would otherwise pay the tax, will be exempt, since the value of the tax credit is equal to or more than the amount they would owe. This also means an owner of a home assessed at above $400,000 will only pay tax on the amount over $400,000 (for example, for a $500,000 property, the owner will only pay tax on $100,000). The credit is limited to $2,000 per owner and $2,000 per property (in the case of multiple owners) per year. The tax credit cannot be carried forward or transferred to a spouse.
Foreign owners and satellite families – Foreign owners and satellite families can claim a tax credit equal to 20% of their B.C. income to reduce the 2% speculation and vacancy tax owing. The tax credit cannot reduce the tax rate below the rate for an equivalent B.C. resident (zero on a principal residence or 0.5% on other properties). Unused B.C. income may be carried forward for up to two years or transferred to a spouse. The tax credits are pro-rated in 2018, when the tax rate is 0.5% for all owners.
Other Canadians – Non-B.C. resident Canadians will be eligible for a tax credit based on that income claimed in B.C. The tax credit cannot reduce the tax rate below the tax rate for an equivalent B.C. resident. Unused tax credits may be carried forward for up to two years or transferred to a spouse. The tax credits are pro-rated in 2018, when the tax rate is 0.5% for all owners.
What is a declaration for the speculation and vacancy tax?
All residential property owners in a designated taxable region have to complete an annual declaration to claim any relevant exemptions.
If you own residential property in a designated taxable region, the Province will send you a speculation and vacancy tax declaration letter telling you how to complete your declaration. The letter will list all the residential properties you own.
Does everyone have to complete a declaration?
If you don’t own residential property in a designated taxable region, you don’t need to complete a declaration because the tax doesn’t apply to you.
If you own residential property in a designated taxable region, you will need to complete a declaration. Even if you won’t be required to pay the tax, you need to complete a declaration to claim any relevant exemptions.
When do I have to pay my speculation and vacancy tax?
If you owe speculation and vacancy tax, your payment is due by July 2, 2019.
What methods of payment can I use?
You will be able use our online payment system or you can also pay through your financial institution, by cheque, or in person at a Service BC centre.
What happens if I don’t pay all or part of what I owe?
If you are charged the speculation and vacancy tax but don’t pay what you owe, you may be charged a penalty and interest in addition to the amount of tax you owe.
What happens if I pay the speculation and vacancy tax, then find out later I’m exempt? Can I get a refund?
Yes. You’ll be able to receive a refund if you paid the speculation and vacancy tax but learn later that you’re exempt. You will need to contact us to request the refund or the credit will be applied to your next year’s speculation and vacancy tax.
Information courtesy of the Government of BC
This is a question that has come up a lot over the last few weeks as people have been shocked by the substantial increases in property assessments this year by BC Assessments; in some cases by up to 40%!
So does that mean in April, the amount of property taxes we pay annual will go up by 40%?!
To answer that question we need to look at how property taxes work.
When you own or lease a property in B.C., property taxes must be paid yearly for each property. The money raised from the property taxes you pay is used to fund local programs and services, such as:
- Police and fire protection
- Emergency rescue services
- Road construction and maintenance
- Garbage services
- Recreation and community centres
How Much Property Tax Do I Have To Pay?
The amount you pay is based on the funds needed to provide the above services for the year. Tax rates are set to determine how to share the cost of providing the services by all those living in that particular community and are set jointly by the city/municipality and province.
Tax rates are adjusted every year to make sure the funds needed to provide services are raised.
So how much tax you will ultimately pay will be based not only on the assessed value of your real estate assets but also on the tax rate determined by the city/municipalities you live in to cover the cost of all the services in your area.
Eg. Assessed Value X Tax Rate = Property Taxes for 2017
Assuming the cost of services has NOT gone up by 40% since last year (it hasn’t we checked) the rate that will be applied to calculate your taxes should in fact therefore be less than last years to offset the increased assessed values this year. Will your taxes be higher than last years? Most definitely. However, they will unlikely go up at the same rate as your assessed values did.
If you want more information on this or have any real estate related questions, do not hesitate to contact us at the Mansour Real Estate Group by email or phone.
With so many new home purchasing incentives available for BC residence it is good to know what you qualify for and what you don’t before starting your search as some programs could make a big difference in your purchasing power.
It is sometimes not so easy to get accurate information on all the programs so we decided to put them all in one place for you.
If you have any questions about what you read here or anything to do with Real Estate, do not hesitate to give us a call at the Mansour Real Estate Group 604-319-5827
First Time Home Buyers’ Program
What do you get?
This program offers first time home buyers an exemption on having to pay the Property Transfer Tax that is levied on ALL BC real estate purchases. Buyers not eligible for this program will have to pay 1% on the first $200,000 and 2% on the remainder up to $2,000,000 purchase price, after which it is 3%.
Do You Qualify?
To qualify for a full exemption, at the time the property is registered you must:
- be a Canadian citizen or permanent resident
- have lived in B.C. for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a B.C. resident in the last 6 years
- have never owned an interest in a principal residence anywhere in the world at any time
- have never received a first time home buyers’ exemption or refund
and the property must:
- be located in B.C.
- only be used as your principal residence for a minimum of 1 year from the date of Purhase
- have a fair market value of:
- $475,000 or less
- be 0.5 hectares (1.24 acres) or smaller
You may qualify for a partial exemption from the tax if the property:
- has a fair market value less than:
- is larger than 0.5 hectares
- has another building on the property other than the principal residence
BC Home Owner Mortgage and Equity Partnership
What do you get?
This program offers first time home buyers an option to receive a repayable loan up to a maximum five per cent of the purchase price ($37,500) with NO payments and NO interest for 5 years from the BC Government.
The loan can NOT exceed the Buyer’s personal down payment (they will only match it) and the total down payment with the loan can NOT exceed 20% of the purchase price.
Do You Qualify?
To qualify for BC HOME Partnership loan, anyone who appears on the title of the home must meet the following criteria:
- Be a Canadian citizen or permanent resident for the last five years
- Have lived in British Columbia for at least the full 12 months preceding your application
- Be a first-time homebuyer who has not owned an interest in a principal residence anywhere in the world at any time and has never received a first-time homebuyers’ exemption or refund
- Purchase a home that is $750,000 or less.
- Total down payment (including the BC Government portion) can NOT exceed 20% of the Purchase Price.
- Be eligible for a high-ratio insured first mortgage for the home
- The combined, gross household income of all individuals on the title must not exceed $150,000.
- The home being purchased must be used as the principal residence of all individuals on the title for the five years after purchasing.
The Mansour Real Estate Group would like to invite you to our Client Referral Appreciation Event – Batman Movie Day 2017. On February 12, 2017 (Family Day long weekend) come join us and enjoy a movie with your loved ones on us!!Continue reading →
Everyone at the Mansour Real Estate Group was honored and humbled to host all of you and it was so amazing to see you and your families enjoy the day on the ice with us!
Thank you for your referrals throughout the year…we couldn’t do any of this without them!!
View photos of the event and like our page at www.facebook.com/MansourRealEstateGroup