TAX GRABS THAT YOU ARE SUPPOSED TO FEEL GOOD ABOUT PAYING!

CITY OF VANCOUVER EMPTY HOMES TAX


  • Applies to the property (not the owner) and applies only to properties located in Vancouver (Properties in the University Endowment Lands are not included).  
  • Properties deemed to be empty will be subject to a tax of 1% of the property's 2018 assessed taxable value. 
  • Does not apply to homes which are principle residences or tenanted for 6 months of the year (however, it's very difficult to terminate a 6 month term lease, unless the tenant agrees to leave).
  • Must submit a declaration of the property will be deemed vacant and will be subject to tax and a $250 penalty for late filing.  Only one owner needs to file a declaration.  
  • Can submit a notice of Complaint up to 34 days after you receive a Supplementary Vacancy Tax Notice disallowing your Empty Homes Tax Declaration.  After thatt you are out of luck - even if the property was exempt from the tax!

SPECULATION AND VACANCY TAX

  • TAX applies to the owners, not the property.
  • Applies to residential properties in designated taxable regions of BC. 

Designated Taxable Regions include:  The Capital Regional District Metro Vancouver Regional District (excuding Bowen Island and the Village of Lions bay but including UBC and University Endowment Lands, Abbotsford, Mission, Chilliwack, Kelowna, Nanaimo and Lantzville).  

  • All owners must complete a declaration to claim any relevant exemptions by March 31, 2019. 
  • payment is due by July 2, 2019 if tax is payable. 
  • 144,000 people missed the deadline this year, so the government is backing off on penalizing them for now.  

IF YOU DON'T COMPLETE YOUR DECLARATION LETTER, YOU WILL BE CHARGED TAX AT THE MINIMUM TAX RATE OF 2%

  • Application of the Act:  applies retroactively to the 2018 calendar year.  Retroactive legislation is always considered a poor choice, because it doesn't allow people to properly plan their affairs.  
  • Highest Tax Rate for foreign entities and satellite families:  2% of the assessed value. 
  • Lowest Tax Rate - Canadian Citizens, permanent residents and residents of B.C.:  tax rate of 0.5%

2018 CALENDAR YEAR - applicable tax rate is 0.5% for every owner regardless of residency status (assuming that they file a declaration).  


Common Exemptions:  Principle Residence, Tenanted Property, Year of Acquisition Exemption, Rental restriction by-laws (2018 and 2019 years only - after that you have to move in, rent it, sell it or pay the tax). 


GOODS AND SERVICES TAX (GST)


  • GST does NOT apply to pre-owned (used) residential homes;  GST is applicable on properties that are newly built or have been substantially renovated (90% or more).  
  • New housing rebate is available:  equals to 36% of the GST and the rebate is up to $6300 for homes with a purchase price of $350,000 or less.  Rebate is available if the home is priced between $350,000 and $450,000. Over $450,000 no rebate is available. 
  • GST is 5% of the purhcase price and is due on Completion 
  • GST can be payable TWICE on newly constructed residential properties (e.g. if GST was paid on the original purchase and the property was re-sold without being occupied in the interim)
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What is the Home Renovation Tax Credit (HRTC) & How Can I take Advantage of It?

March 13th, 2009

The Home Renovation Tax Credit (HRTC)

·         Implemented in the 2009 Federal Government Budget

·         Is a non-refundable tax credit for work performed or goods acquired in respect to an Eligible dwelling?

·         An Eligible Dwelling is one’s principal residence, a cottage or summer home occupied personally.

·         A property you own that family members reside in during the time period from January 27th, 2009 to February 1st, 2010. 

·         Eligibility is family based.  A family is an individual and his/her spouse/common law partner including children less than 18 years of age by the end of 2009.

·         If 2 or more families own and occupy the same residence, then both families will be eligible for their own separate tax credit.

·         Eligible expenses must fall between $1,000 and $10,000.  The maximum tax credit is $1,350 (15% of $9,000).

·         The Tax Credit is ONLY for the 2009 Taxation year. 

 

What Qualifies as an Eligible Expense?

 

·         Expenses incurred with respect to a renovation must be of an enduring nature and integral to the home.

·         This includes cost of labor, professional services, building materials, fixtures, rentals and permits.

·         You MUST have documentation to prove this.  Agreements, Contracts, Invoices, or Receipts.

·         The type and quantity of goods purchased or services received must be listed.

·         The Contractor’s name, business address, gst/hst registration number as well as the address where the work was performed must be on the Documentation. 

·         Proof of Payment must be noted as well.

 

Eligible Expenses:

 

·         Renovations to a Kitchen, Bathroom or Basement.  *(appliances are not eligible nor is renovations to a tenanted basement suite in your principal residence)*

·         New Carpets or Hardwood Flooring.

·         Building of an addition, garage, deck, shed or fence.

·         Painting of the exterior and interior of your homeRe-shingling of a roof.

·         A new furnace, woodstove, boiler or water heater.

·         A new driveway or the re-surfacing of an existing one. 

·         Laying of new sod.

·         Swimming pools both in ground and above.

·         Costs of permits, equipment rentals and incidental expenses related to the renovation.

·         *If you own a condo and a special levy is approved for the upgrading of a Common Area and a special assessment is passed for this levy, you would be eligible for a tax credit based on your unit entitlement.*  Please check with your Strata Management Company, Accountant and Lawyer for specifics. 

·         Expenses are not eligible if the work performed or the goods acquired are provided by a person not dealing at arm’s length. For example, if your brother-in-law helps you re-shingle your roof and is not registered with gst/hst and you pay him in cash or cheque, then you can’t claim the expenses.

·         Renovations that qualify for the Medical Expense Tax Credit (METC) is an eligible expense and one can claim both the (HRTC) & (METC).

·         Eligible expenses will not be reduced by other qualifying Government grants or Tax Credits.

 

Please note that the above information is just a guideline and for complete details or information, please contact the CRA Canada Revenue Agency, www.cra-arc.gc.ca or speak to your Accountant prior to renovating. 

 

If you or anyone you know are thinking about Selling and wish to renovate prior to doing so, please call me for a no obligation consultation of which renovations will increase the property’s value more than others. Also, should you hear of anyone thinking of buying or selling real estate, please keep me in mind as I am never too busy for any of your referrals!

 

Regards,

 

 

 

Robert Britch

www.robbritch.com

www.vancouverbcrealestate.ca

Email:  robbritch@telus.net

Tel:  604-240-5813

Quality Service since 1993!

                                                   

 

 

Not intended to Solicit Properties Already Listed for Sale.

 

The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.