A Real Estate Lawyer’s Guide To B.C.’s Property Taxes
In an attempt to ease pressure off of the competitive Vancouver real estate market, an array of new government taxes have been brought in.
PROPERTY TRANSFER TAX (SCHOOL TAX)
This is the most recent tax change to hit property owners. In February 2018, the Property Transfer Tax was raised from 3% to 5% on homes worth over $3 million.
The New Democratic Party implemented this change to raise money for their plans to build 114,000 new affordable homes in the area, over the next decade.
In addition to the Property Transfer Tax increase, a 0.2% school tax has also been introduced on properties with a value of more than $3 million. For properties over $4 million, this tax will be 0.4%.
This is something those looking to buy new property should be aware of. Likewise, the new tax may also encourage those with properties worth over $3 million, to consider selling and downsizing.
EMPTY HOMES TAX
Last year, the Empty Homes Tax was brought in to discourage home owners from allowing their homes to sit unoccupied. Any homeowner must have their property occupied for at least six months of the year to avoid being faced with the tax. The tax is 1% of the property’s assessed taxable value, plus a $250 fee.
It is hoped that such a large fee would encourage those who own properties that they don’t live in, to rent them out to increase the city’s rental pool.
The tax has received mixed response as while it would be good for there to be more properties available for rent in Vancouver, there is also the sentiment that if you purchase a property, you should have the freedom to do whatever you wish with it.