The Empty Home Tax is a tax imposed by the British Columbia government on owners of residential properties that are left vacant for more than six months of the year. The tax is intended to discourage homeowners from leaving their properties empty and to encourage them to rent out or sell their homes. The tax is calculated as a percentage of the assessed value of the property and is payable by the owner on an annual basis. The tax is not applicable to properties that are being actively marketed for sale, that are undergoing renovations, or that are being used as a secondary residence by the owner.
## Empty Home Tax in British Columbia
### Defining Empty Homes in BC
Empty homes refer to residential properties that are not occupied for the majority of the year. The British Columbia government defines an empty home as one that is not used as a primary residence and does not meet certain exemptions for qualified tenants or specific circumstances. Here are the key characteristics of an empty home under the Empty Home Tax (EHT) guidelines:
– **Unoccupied for more than 6 months:** The property must be vacant for more than half of the year, with no overnight stays exceeding a cumulative total of 30 nights.
– **Vacancy for non-exempt reasons:** Legitimate reasons for vacancy, such as renovations, death in the family, illness, or extended travel, are exempt.
– **No tenants meeting eligibility criteria:** The property must not be rented to eligible tenants, including immediate family members, long-term tenants holding a lease of at least 30 days, or tenants who are Canadian citizens or permanent residents.
### Criteria for Exemption
Properties may be exempt from the EHT if they meet certain criteria, including:
– **Primary residence:** The property is owner-occupied as the primary residence.
– **Secondary home:** The property is used as a secondary residence by the owner, their spouse, or common-law partner.
– **Rental properties:** The property is rented to eligible tenants as defined by the EHT guidelines.
– **Renovations or repairs:** The property is undergoing substantial renovations or repairs that render it uninhabitable.
– **Medical or compassionate leave:** The owner or tenant is absent due to medical or compassionate reasons.
– **Death or illness:** The property is vacant due to the death or illness of the owner or tenant.
– **Rental restrictions:** The property is subject to rent control or other rental restrictions that prohibit charging market rent.
### How the EHT Works
The EHT is a tax levied on eligible empty homes in designated jurisdictions within British Columbia. The tax is calculated as a percentage of the property’s assessed value, as shown in the table below:
| Property Value | EHT Rate |
|—|—|
| Up to $1,000,000 | 0.5% |
| $1,000,000 to $3,000,000 | 1.0% |
| $3,000,000 to $4,000,000 | 1.5% |
| Over $4,000,000 | 2.0% |
Owners of eligible empty homes are required to declare their property status and pay the EHT annually. Failure to do so may result in penalties and interest.
### Conclusion
The Empty Home Tax is a measure intended to address the issue of vacant residential properties in British Columbia. By encouraging the occupation of these homes or putting them on the rental market, the government aims to increase housing supply and affordability for residents.
## What is the Home Tax in BC?
The Home Tax is an annual property tax levied by the Province of British Columbia on residential properties with a combined assessed value of more than $1,000,000. The tax is designed to generate revenue for housing affordability initiatives, such as the construction of new affordable housing units and the provision of rent subsidies.
### Tax Rates
The Home Tax is calculated based on the assessed value of your property, as determined by BC Assessment. The tax rates for the 2023 tax year are as follows:
| Assessed Value | Tax Rate |
|—|—|
| $1,000,001 – $1,500,000 | 0.2% |
| $1,500,001 – $2,000,000 | 0.4% |
| $2,000,001 – $3,000,000 | 0.6% |
| $3,000,001 – $4,000,000 | 0.8% |
| Over $4,000,000 | 1.0% |
### Exemptions
There are a number of exemptions to the Home Tax, including:
* Principal residences
* Properties owned by Canadian citizens or permanent residents who are 65 years of age or older
* Properties owned by persons with disabilities
* Properties owned by charities, religious organizations, and governmental bodies
* New construction that has not been previously occupied
If you qualify for an exemption, you must apply to the BC Home Owner Grant Program.
The Empty Home Tax in British Columbia
The Empty Home Tax is a tax levied on residential properties in the Metro Vancouver region that are left vacant for more than six months of the year. The tax was introduced in 2018 as a measure to increase housing supply and affordability.
Impact on Housing Supply
- The Empty Home Tax has been successful in increasing housing supply. In the first year of the tax, the number of vacant properties in the Metro Vancouver region dropped by 10%. This freed up thousands of homes for sale or rent, helping to ease the housing shortage.
- The tax has also discouraged investors from buying properties and leaving them empty, which has helped to lower housing prices. In the second year of the tax, the average home price in the Metro Vancouver region fell by 5%.
- The Empty Home Tax has had a positive impact on housing affordability. By increasing supply and lowering prices, the tax has made it easier for first-time buyers and renters to enter the market.
| Year | Tax Rate |
|---|---|
| 2018 | 1% |
| 2019 | 1.5% |
| 2020 | 2% |
The Empty Home Tax is a complex issue with both positive and negative impacts. However, there is no doubt that the tax has had a significant impact on housing supply and affordability in the Metro Vancouver region.
Implementation
The Empty Home Tax (EHT) was introduced in the province of British Columbia, Canada, in 2018 as a measure to address the issue of vacant homes and promote the availability of housing for residents. The tax applies to residential properties that are not a primary residence, are not exempt, and are left unoccupied for more than six months in a calendar year.
To determine if a property is subject to the EHT, the province uses data from BC Hydro, utility companies, and property tax records to identify properties that have low energy consumption or are not receiving mail. Property owners are responsible for declaring the occupancy status of their properties and providing evidence of exempt use if applicable.
Enforcement
- The EHT is enforced by the British Columbia Ministry of Finance. Failure to declare the occupancy status of a property or providing false information may result in penalties.
- Property owners who are found to be in violation of the EHT may be issued a penalty of up to $10,000, in addition to owing the unpaid tax. The penalties are intended to deter non-compliance and encourage property owners to make their vacant homes available for residential use.
- The province also has a whistleblower program that allows individuals to report suspected violations of the EHT. Individuals who provide information that leads to a successful penalty or tax assessment may be eligible for a reward.
| Year | Number of properties declared vacant | Total EHT revenue collected (CAD) |
|---|---|---|
| 2018 | 10,092 | $19.8 million |
| 2019 | 17,233 | |
| 2020 | 20,672 |
And that’s it, folks! The Empty Home Tax in BC, explained in a (hopefully) easy-to-understand way. I hope this article has helped you wrap your head around what this tax is all about and how it might affect you. If you’re thinking about selling or renting out your empty home, be sure to do some research and figure out if you’re eligible for any exemptions or deferrals. And remember, if you have any questions, the BC government website has lots of helpful information. Thanks for reading, and be sure to check back later for more updates on the Empty Home Tax and other important real estate news. Cheers!