Speculation and Vacancy Tax: Frequently Asked Questions
What is the speculation and vacancy tax in BC?
The speculation and vacancy tax is a provincial measure in British Columbia aimed at increasing housing availability by discouraging empty or underused homes. Below, we outline the current tax rates, how the tax is calculated, important deadlines, and examples to help you understand how it might apply to you.
Disclaimer: This information is provided for general educational purposes only and should not be taken as tax, legal, or financial advice. Tax rules can change, and individual circumstances vary. For personalized guidance, please consult a qualified accountant or tax professional.
What is the speculation and vacancy tax in BC?
The speculation and vacancy tax is a provincial tax in British Columbia that applies to certain residential properties in designated regions if they are left vacant or underused. It was introduced to encourage owners to rent out empty homes and help increase housing supply. Each year, property owners must declare how their property was used. If no exemption applies, the tax is charged based on the assessed value of the property.
How much is the speculation and vacancy tax?
The rate depends on who owns the property and their tax residency status.
- 2018: 0.5% of assessed value for all owners.
- 2019 to 2025:
- 2% for foreign owners and untaxed worldwide earners.
- 0.5% for Canadian citizens and permanent residents (who are not untaxed worldwide earners).
- 2026 and onwards:
- 3% for foreign owners and untaxed worldwide earners.
- 1% for Canadian citizens and permanent residents (who are not untaxed worldwide earners).
Who is considered an “untaxed worldwide earner”?
An untaxed worldwide earner is someone (often part of what’s called a “satellite family”) who earns most of their income outside of Canada and does not pay Canadian income tax on that income. They are subject to the higher tax rate, just like foreign owners.
When do you have to pay the speculation and vacancy tax?
The speculation and vacancy tax is based on property ownership as of December 31 each year. The tax year matches the calendar year, and any amount owing is due the following July. For example, taxes for 2024 must be paid by July 2, 2025.
How is the speculation and vacancy tax calculated?
The tax is calculated using this formula:
Tax = Assessed Value × Ownership Share × Applicable Rate
- If you own 50% of a property worth $1,000,000 and your rate is 0.5%, you would pay $2,500.
- Each co-owner pays based on their share.
- Corporations, trusts, and partnerships pay at the highest rate applicable to any of their interest holders.
Are there any exemptions to the speculation and vacancy tax?
Yes. Many owners qualify for exemptions if their property is:
- Used as a principal residence.
- Rented out for at least six months of the year (in most cases).
- Undergoing major renovations.
- Newly built or recently purchased.
Even if you qualify for an exemption, you must file an annual declaration to claim it.
What credits are available to reduce the tax?
To help offset the tax for local residents:
- From 2018 to 2025, a non-refundable credit of up to $2,000 is available.
- Starting in 2026, the credit increases to $4,000.
This credit is applied against the amount of tax owing, reducing or in some cases eliminating the payable tax.
Why are the tax rates increasing in 2026?
In 2025, the BC government announced that tax rates would rise in 2026 to further encourage owners to rent out empty homes. Foreign owners and untaxed worldwide earners will see their rate increase to 3%, while Canadian citizens and permanent residents will see their rate rise to 1%. At the same time, the homeowner tax credit doubles from $2,000 to $4,000 to provide some relief for local residents.
Example: How much would you pay?
Let’s say you are a Canadian citizen who owns a $1,000,000 home in a taxable region:
- In 2025: Your rate is 0.5%. You owe $5,000, but with the $2,000 credit, you pay $3,000.
- In 2026: Your rate increases to 1%. You owe $10,000, but with the $4,000 credit, you pay $6,000.
If you rent the property for at least six months, you may qualify for an exemption and pay nothing.
Thinking of Buying or Selling in North or West Vancouver?
Understanding taxes like the speculation and vacancy tax is just one part of making smart real estate decisions. If you’re planning to buy or sell a home in North Vancouver or West Vancouver, our experienced team can help you navigate the market with confidence.
Contact us today to start the conversation.