Guide to the BC Speculation and Vacancy Tax Declaration

What Is the BC Speculation and Vacancy Tax?

The BC Speculation and Vacancy Tax (SVT) was introduced by the British Columbia government in 2018 to address the housing affordability crisis in major urban centres. The tax targets residential properties that are left vacant or underused, with the goal of encouraging property owners to either occupy their homes or make them available for long-term rental. The tax applies annually and is administered by the BC Ministry of Finance.

The SVT applies in designated taxable regions, which include Metro Vancouver, the Capital Regional District (Victoria and surrounding areas), Kelowna, West Kelowna, Nanaimo-Lantzville, Abbotsford, Chilliwack, and Mission. If you own residential property in any of these areas, you are required to complete the annual declaration.

Who Must Declare?

Every owner of residential property in a designated taxable region must complete an SVT declaration each year. This requirement applies regardless of whether you are exempt from the tax. The declaration is how the BC government determines whether you qualify for an exemption or whether the tax applies to your property.

Property owners who must declare include:

• Individuals who own residential property (including condos, houses, and townhomes)
• Corporations that own residential property
• Trusts that hold residential property
• Partners in partnerships that own residential property

If there are multiple owners of a single property, each owner must complete their own declaration. For example, if a married couple jointly owns a home, both individuals must submit a declaration. Newcomers who recently purchased property in BC should be especially aware of this requirement. Our guide to buying your first home in Canada covers related topics.

SVT Tax Rates

The SVT rate depends on your residency status and citizenship:

• Canadian citizens and permanent residents: 0.5% of the property's assessed value
• Foreign owners and satellite families: 2% of the property's assessed value
• Canadian citizens or permanent residents who are members of a satellite family: 2% of the property's assessed value

A "satellite family" is defined as a household where the majority of total worldwide income is not reported on a Canadian income tax return. This provision targets situations where a family member lives in BC but the primary income earner reports income outside of Canada. For those unsure about their residency status for tax purposes, the CRA residency determination page is helpful.

Common Exemptions

Most property owners in the designated regions are exempt from the SVT. However, you must still declare to claim your exemption. Common exemptions include:

Principal Residence Exemption

If the property is your principal residence and you live there for the majority of the year, you are exempt. You must be a Canadian citizen or permanent resident (or have a spouse who is) and the property must be your primary home.

Tenanted Property Exemption

If you rent out your property to a qualifying tenant for at least six months of the year in periods of at least 30 consecutive days, you are exempt. The rental must be at arm's length and at fair market value. Short-term rentals through platforms like Airbnb do not qualify unless they meet the minimum duration requirements.

Separation or Divorce

Properties subject to a separation agreement or divorce order may qualify for an exemption during the transition period.

Deceased Owner

Properties owned by a recently deceased person may be exempt for the year of death and potentially the following year while the estate is being settled.

Property Under Renovation

If a property is undergoing major renovations that prevent occupancy, it may qualify for a limited exemption. The renovation must be substantial and you must have obtained the necessary building permits.

Other Exemptions

Additional exemptions exist for properties with restricted use (such as strata rental restrictions), properties owned by certain types of trusts, and properties in specific circumstances. The full list is available on the BC SVT exemptions page.

How to Complete Your SVT Declaration

Step 1: Receive Your Declaration Letter

Each year, typically in January or February, the BC government mails declaration letters to all residential property owners in designated regions. The letter contains your unique declaration number and instructions for completing the declaration online or by phone. If you do not receive a letter but own property in a taxable region, you should contact the SVT office directly.

Step 2: Declare Online

The easiest way to complete your declaration is online through the BC SVT declaration portal. You will need your letter ID, your Social Insurance Number (SIN) or Individual Tax Number (ITN), and your date of birth. Follow the prompts to indicate whether you are claiming an exemption and which exemption applies.

Step 3: Provide Required Information

Depending on the exemption you are claiming, you may need to provide additional information. For the principal residence exemption, you will confirm that the property is your primary home. For the tenanted property exemption, you will need to provide details about your tenants, including their names and the rental periods. For newcomers, having your SIN number ready is essential.

Step 4: Submit Before the Deadline

The declaration deadline is typically March 31 of each year. Missing the deadline means you will be assessed the SVT at the applicable rate, even if you would have qualified for an exemption. Late declarations may be accepted in some circumstances, but there is no guarantee. It is strongly recommended to submit your declaration well before the deadline.

What Happens If You Do Not Declare?

If you fail to submit your SVT declaration by the deadline, the BC government will assess the tax at the highest applicable rate based on your ownership profile. For foreign owners, this means 2% of the property's assessed value, which can amount to tens of thousands of dollars. Even Canadian citizens and permanent residents who fail to declare will be taxed at 0.5%.

You may be able to request a late declaration or appeal the assessment, but this process can be lengthy and is not guaranteed to succeed. The simplest approach is to declare on time every year.

SVT and Other BC Property Taxes

The SVT is separate from other property taxes in British Columbia. It is in addition to:

• Municipal property taxes - The annual property tax assessed by your municipality.
• Provincial school tax - The additional school tax on properties valued above certain thresholds.
• Foreign Buyers Tax - The additional property transfer tax of 20% that applies when a foreign national or foreign corporation purchases residential property in certain areas.
• Empty Homes Tax (Vancouver only) - The City of Vancouver has its own separate Empty Homes Tax that requires a separate declaration.

If you own property in Vancouver, you must complete both the SVT declaration (provincial) and the Empty Homes Tax declaration (municipal). These are two different taxes with different exemption rules and different deadlines. For more information about managing your finances in BC, see our guide to the BC Climate Action Tax Credit.

Special Considerations for Newcomers

If you are a newcomer to Canada and own residential property in a designated SVT region, pay close attention to your residency status and whether you qualify as a member of a satellite family. The 2% rate for foreign owners and satellite families is significantly higher than the 0.5% rate for Canadian residents.

If you recently became a permanent resident, make sure to update your status with the SVT office. Your tax rate may change from the foreign owner rate to the Canadian resident rate once you obtain permanent residency. Keep documentation of your immigration status changes, as the SVT office may request proof.

Newcomers who are renting out their property while living elsewhere should carefully review the tenanted property exemption requirements. The rental must meet specific criteria regarding duration and the type of tenancy agreement. Our guide to tenant rights in Canada provides useful background information.

How to Pay the SVT

If you are assessed the SVT (because you do not qualify for an exemption or failed to declare), you will receive a tax notice from the BC government, typically in the fall. Payment is due by the date specified on the notice, usually in early January of the following year. Payment can be made online through your bank, by cheque, or through the BC government's online payment system.

If you cannot pay the full amount by the due date, interest will accrue on the unpaid balance. Contact the SVT office to discuss payment arrangements if needed.

Appealing an SVT Assessment

If you believe your SVT assessment is incorrect, you can appeal by filing a Notice of Complaint with the SVT office. This must be done within 90 days of receiving your assessment notice. The appeal process allows you to present evidence that you qualify for an exemption or that the assessment was made in error. If the initial complaint is not resolved to your satisfaction, you can escalate the matter to the Property Assessment Appeal Board.

Tips for Managing Your SVT Declaration

• Set a calendar reminder. The declaration period typically opens in mid-January and closes March 31. Set a reminder to complete it early.
• Keep your mailing address updated. The declaration letter is mailed to the address on file with BC Assessment. If you have moved, update your address to ensure you receive the letter.
• Save your confirmation number. After completing your declaration online, save the confirmation number for your records.
• Declare for every property. If you own multiple properties in designated regions, you must complete a separate declaration for each one.
• Maintain rental records. If claiming the tenanted property exemption, keep copies of lease agreements, rent receipts, and tenant information for at least five years.

Final Thoughts

The BC Speculation and Vacancy Tax is an important annual obligation for residential property owners in designated regions of British Columbia. While most homeowners who live in their properties will qualify for the principal residence exemption, the key requirement is to complete the declaration every year. Missing the deadline can result in a significant tax assessment, even for those who would otherwise be exempt. Take the time to understand which exemption applies to you, gather the necessary information, and submit your declaration well before the March 31 deadline.

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