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Empty Home Tax Declaration: Don’t Forget To Declare Your Property Status!

By December 28, 2021Uncategorized
woman trying to complete an empty home tax declaration

If you own one or more residential properties, you are required to make a yearly property status declaration. This will determine if your property has to be subjected to the Empty Homes Tax.

Properties deemed, or declared empty in the 2021 reference year, are subjected to a 3% property tax from its fully assessed taxable value in that year. Keep in mind that the Province of BC requires a Speculation and Vacancy Tax on top of the City’s Empty Home Tax. 

So, for example, if you own residential property in Vancouver city, you will be expected to pay both taxes. 

 

Annual Declaration For The Speculation And Vacancy Tax

This is a document that all property owners must complete for their designated taxable regions. If this is your first time submitting a declaration, start by learning how to do it. 

If you’ve submitted the declaration in the past, you are still required to send it through this year too, even if your information hasn’t changed. 

All individuals owning residential property in one of the designated taxable regions in BC need to complete their annual declaration by March 31st.

Vancouver’s Empty Homes Tax mentioned above differs from this tax. 

 

What Is The Empty Homes Tax Anyway?

If you are not familiar with it, The Empty Homes Tax (a.k.a. “The Vacancy Tax”) was introduced in 2017 to encourage returning empty and under-utilized properties to the market as long-term rental homes for people living and working in Vancouver. 

This means that every year, Vancouver homeowners are obliged to submit a declaration determining if their property falls under the Empty Homes Tax or not.

Most homes are not subjected to the tax, as it doesn’t apply to principal residences, homes that qualify for an exemption, or homes rented for at least six months per year. Net revenues obtained from the tax will be reinvested into affordable housing initiatives. 

For the past ten years, the government has been implementing the Housing Vancouver Strategy. Designed to tackle the housing crisis, it helps provide more affordable and livable housing conditions for the Rain City residents. The Empty Homes Tax is just one of its key points. 

Since the tax was launched in 2017, several positive trends have emerged. The Canada Mortgage Housing Corporation (CMHC) observed a shift toward long-term rental in the condominium stock around Vancouver, coinciding with the implementation of tax policies such as EHT.

 

How To Complete The Declaration

man filling in an empty home tax declaration

Completing an online declaration only takes a couple of minutes, making it much more efficient and guaranteeing your information remains safe and secure. 

If you own property in Vancouver, you’ll need to stay updated with the regulations surrounding both taxes — and other types of tax, such as the tax arrears.

For example, when a property has more owners, each of them needs to complete a separate declaration. This applies even if the other party is a spouse or relative. There are particular circumstances to keep in mind — for example, if the owner is deceased or out of town during the declaration period. 

Before you fill out your online declaration, you’ll need:

  • The speculation and vacancy tax declaration letter received by mail
  • Your Social Insurance Number
  • Your date of birth

Your identity will be verified via Social Insurance Number and date of birth. All personal data is encrypted and secure at the time of entry.

All declaration letters should be delivered to your mailing address — as it is registered on file with the BC Assessment — by late February.

Those who, for whatever reason, are unable to receive the letter should write an e-mail to spectaxinfo@gov.bc.ca or call the toll-free number 1-833-554-2323 (1-604-660-2421, if outside of North America) and will receive all necessary help in order to submit their declaration on time. 

The declaration letter will include the following info:

  • Your Letter ID, Declaration Code and any other information you need to declare
  • A list of all the residential properties you own per designated taxable regions

When filling out the declaration, you’ll be guided through the exemption options for each property.

 

For Corporations, Business Partnerships And Trusts

For these categories, the process is similar. You’ll still receive a declaration letter, but a little more info will be needed:

Be Prepared With:

  • The declaration letter
  • Your business number, if available
  • Your incorporation number and its date, if applicable
  • The name, date of birth, citizenship status, social insurance number if applicable, BC residency for tax purposes and percentage of household income reported for each member of the corporation, business partnership or trust.

 

Empty Home Tax Declaration FAQs:

How Do I Avoid Empty Property Taxes?

If you are undergoing construction or renovations on your property, make sure there still is an occupant on the property for at least 6 months of the year to avoid paying the vacancy tax.

How Much Is The BC Speculation And Vacancy Tax?

According to the latest updates in December 2019, the speculation tax in BC is 0.5% for Canadian citizens and permanent residents and 2.0% of property assessed value for foreign owners, satellite families and other non-citizens or PR.

So keep in mind, 2021 declaration submissions are now open, so make sure to complete and file yours until February 2, 2022. This will determine if your properties will be subjected to the Empty Homes Tax or not. 

Even if you live in your own home or have submitted the declaration last year and nothing changed, it still has to be submitted regardless. If you haven’t received your letter yet, please contact your local tax authority. 

We hope you found this information on the Empty Home Tax useful. Should you need more advice on how to complete your declaration, don’t hesitate to get in touch. As a mortgage broker with years of experience in BC, Canada, I can help you navigate through all the stages of acquiring a property, finding alternative lenders, and applying for a home equity loan, and completing all the paperwork.

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