B.C. temporarily stops vacancy tax on imaginary homes
May 7, 2021
In an April 27 announcement, the B.C. government said it will temporarily stop charging a speculation and vacancy tax on homes that do not and may not ever exist.
Under B.C.’s current tax regime, commercial tenants under triple-net leases (where tenants are also responsible for property taxes) or commercial tenants who are owners are forced to pay the provincial speculation and vacancy tax if the property has been classified for future residential development.
The taxes therefore apply to non-existing homes that may or may not be built in the air space above the property.
Commercial tenants and owners may finally get some relief, but it is for only one year and it does not cover tenants about to write new leases.
Provincial Finance Minister Selina Robinson announced they are accepting applications to have the speculation and vacancy taxes scrubbed.
“We will temporarily remove the speculation and vacancy tax liability for 2020 for property owners that meet certain conditions,” said Robinson. “Both property owners and tenants can now apply for the remission to ensure the people we are trying to help, the tenants, don’t have to wait for the owner to apply.”
“The purpose of the speculation and vacancy tax is to bring much-needed residential housing supply to the market,” said Robinson. “We encourage property owners who have reclassified their properties with unbuilt air space as ‘residential’ to continue in the development process to deliver needed housing supply in dense, urban areas.”
She noted, however, that many of the planned residential units were never built and may never be built.
To be eligible, the commercial lease must have been entered into prior to April 29, 2021, and be valid at the time of application.
The property must contain residential land that is vacant. It may not contain a residence or any portion of a residential improvement.
Robinson said the province will continue working with the Union of B.C. Municipalities and stakeholders to find a permanent solution to the concerns of businesses around property assessment and taxation “that won’t create sudden shifts in tax burden to other businesses already challenged by COVID-19.”