Exemptions for individuals for the speculation and vacancy tax

People who own residential property within designated taxable regions of B.C. may be eligible for an exemption from the speculation and vacancy tax.

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Shared ownership

When more than one owner is on title for a residence in a taxable region, each owner claims their relevant exemption, if any. Different exemptions may apply to different owners.

Example: If a parent co-owns a home with their adult child and the adult child lives in the home and the parent lives elsewhere, then the following exemptions may apply:

  • The child claims the principal residence exemption
  • The parents claim the tenancy exemption for family or other non-arm's-length persons

Exemptions

Read about the exemptions that are available for individuals:

Principal residence-related exemptions

Principal residence

Generally, an owner is exempt from the tax if the residential property is their principal residence. People who have multiple homes can only claim the principal residence exemption on the home they live in for the longest period in the calendar year.

To be eligible for a principal residence-related exemption, an owner must be a Canadian citizen or permanent citizen of Canada who's a B.C. resident for income tax purposes and is not part of a satellite family. 

In some cases, an owner may be asked to provide supporting documentation to confirm a property is their principal residence. 

Spouses cannot claim two different principal residence exemptions unless specific situations apply, such as spouses living apart for work or medical reasons or because of recent separation or divorce.

Person with a disability lives in the residence

Owners of a property are exempt if a person with a disability lives there as their principal residence. The disability can be designated under the Canada Pension Plan, Employment and Assistance for Persons with Disabilities Act, or the federal Disability Tax Credit under the Income Tax Act.

Note: The exemption applies if anyone who lives in the residence has a disability, not just the owner. 

Example: Co-owners of a home have an adult child who is paraplegic. The co-owners do not live in the home but their adult child lives there as their principal residence. The adult child is designated as a person with disabilities under the Canada Pension Plan, and so the co-owners qualify for this exemption.

Similar to other tax circumstances requiring authorization, if an owner is physically or mentally unable to complete the declaration, they can arrange for an authorized person to take responsibility for them, such as through a legal power of attorney.

Living apart from spouse for work reasons

Spouses who live apart for work reasons may be able to claim a principal residence exemption on an additional home.

Find out more about commuter spouses for work reasons.

Living apart from spouse for medical reasons

Spouses who live apart for medical reasons may be able to claim principal residence exemptions on an additional home. Find out more about commuter spouses for medical reasons.

Similar to other circumstances requiring authorization, if an owner is physically or mentally unable to complete the declaration, they can arrange for an authorized person to take responsibility for them, such as through a legal power of attorney.

Lived in the residence before moving out of province

An individual who had been living in the home but moves out of the province before the end of the year can still claim an exemption, even if they were not a B.C. resident for tax purposes at the end of the year.

Example: A B.C. homeowner moved out of their home in October and was a resident of Ontario at the end of the year, but was not able to sell the house by the end of the year. They would be eligible for this exemption for their previous residence in B.C. for the year they moved to Ontario.

Member of the Canadian Armed Forces

If you or your spouse is a member of the Canadian Armed Forces and is away from home due to military service requirements, you may claim an exemption for that year.

Previous principal residence

The principal residence exemption also applies in cases where the owner lived in the principal residence but no longer lives there under these circumstances:

Lived in home before going into residential care

An owner is exempt from the tax for up to two years if they lived in the home before entering a residential care facility due to age, disability, addiction, illness or frailty. The residential care facility must offer services such as daily meals, housekeeping or nursing care.

The owner must have been a B.C. resident for income tax purposes, and the property must have been the owner’s principal residence:

  • In the calendar year before they entered residential care, or

  • In the year before an "applicable period" if the applicable period came just before they entered residential care

​Example: An owner lives in their home through 2019, then in January 2020 moves to a residential care home for the elderly. They qualify for this exemption for 2020 and 2021.

Similar to other tax circumstances requiring authorization, if an owner is physically or mentally unable to complete the declaration, they can arrange for an authorized person to take responsibility for them, such as through a legal power of attorney.

Contact us if you have any questions.

Away from home for medical reasons

An owner is exempt from the tax if they’re away from their home to receive medical treatment for themselves, their spouse or their minor child. The medical treatment must be required, as certified by a medical practitioner. The owner must certify that the treatment is impractical to obtain closer to the principal residence. This exemption is available for up to two years for the same medical condition.

The owner must have been a B.C. resident for income tax purposes, and the property must have been the owner’s principal residence:

  • In the calendar year before they left for the medical treatment, or

  • In the year before an "applicable period" if the applicable period came just before they left.

Example: A homeowner lives in their home up to 2020 and then, during January to August 2021, they live in accommodations near Children's Hospital in Vancouver while their child receives medical treatment. They qualify for this exemption for 2021 even though they did not live in their home longer than anywhere else that year.

Away from home for other reasons (valid once in 11 years)

A B.C. resident can claim a principal residence exemption if they’re away from their principal residence for an extended time or no longer living in it, unless they are incarcerated. 

The owner must have been a B.C. resident for income tax purposes, and the property must have been the owner’s principal residence:

  • In the calendar year before they left their home for an extended time, or

  • In the year before an "applicable period" if the applicable period came just before they left.

Example: A B.C. homeowner lives in their principal residence up to 2020 then takes a one-year job in Northern B.C. in 2021 before returning to their home. They qualify for this exemption for 2021 but if they claim it in 2021, they cannot use this exemption again until 2032.

Occupied by a tenant

If a renter or non-arm’s length tenant occupies an owner’s home for at least six months in the calendar year, the owner may be exempt from the tax. For the owner to be eligible for the exemption, tenancy requirements must be met. Review these requirements and the tenancy examples provided with the requirements before completing the declaration to ensure the correct requirements are met.

Cannot live in the residence because it’s uninhabitable

All owners of a property may claim an exemption if no one can live in a residence because it becomes uninhabitable due to a hazardous condition or because the residence is substantially damaged or destroyed.

To be eligible, there must have been at least 60 consecutive days in the year when no one could live there. This exemption is available in the year the property became uninhabitable, and in the following year if the property remains uninhabitable for at least 60 days in the second year.

Example: A home is damaged by a fire in October 2020 and cannot be inhabited for six months until all repairs have been completed, which will require more than two months of work in 2020 and more than three months of work in 2021. The homeowners are eligible for this exemption for both 2020 and 2021.

Secondary residence close to medical treatment facility

An owner is exempt for a calendar year on a secondary residence if:

  • It is periodically occupied by the owner (or the owner’s spouse or child) so they can receive medical treatment required for their health, and
  • The treatment facility is close to that second home

For this exemption only, it does not matter if the owner’s child is an adult or a minor. However, this exemption requires written certification from a medical practitioner.

Example: A family buys a second home near a treatment facility so the family can have a place to live while their child is undergoing a lengthy medical treatment and recovery period. They are eligible for this exemption for each year in which they occupy the home periodically because of their child’s medical treatment nearby.

Just bought or inherited the property

Owners are exempt in the year they bought or legally inherited the property.

A newly bought property is exempt if you paid the property transfer tax or did not have to pay the property transfer tax for one of the following reasons:

  • First-time home buyers’ exemption
  • Newly built homes exemption
  • Reversion, escheated or forfeited land exemption
  • Transfers to or from a trustee in bankruptcy
  • Transfer of land by Public Guardian and Trustee
  • Transfer to a veteran or veteran's spouse

Example: An owner purchased a property in March 2020 and paid property transfer tax on the transaction. For the 2020 tax year, the owner may claim the year of purchase exemption. In 2021, the owner must claim a different exemption or else they will be subject to the tax.

Example: A B.C. resident inherits a home in 2020 from the estate of a grandparent but does not plan to move into it until 2021. The B.C. resident is eligible for this exemption for 2020.

Separation or divorce

Spouses are eligible for an exemption on family property if they have separated (due to a breakdown in a spousal relationship) and live apart for at least 90 consecutive days in a calendar year.

  • Separating or divorcing spouses are eligible for the exemption in the year they separate if they live apart for at least 90 consecutive days that year and they do not reconcile
  • Spouses who separate less than 90 days from the end of the year will be eligible for an exemption the following year if they do not reconcile
  • Spouses can claim the exemption for a second year if they have not finalized their division of family property and remain apart and do not reconcile

Bankruptcy

An owner who is on title as a trustee in bankruptcy as of December 31 is exempt from the tax.

A bankrupt owner who is still on title is exempt from the tax if the property was vested in a trustee in bankruptcy as of December 31, or for at least 60 consecutive days during the calendar year.

("Vesting" is different from registration on title.)

Recent death of owner

If an owner of a property dies, all owners of the property at the time of death are exempt in the year of death and the immediately following calendar year. The person managing the estate is also exempt, even if they were not on title at the time of the death.

Example: A married couple co-owns a second home. If one spouse dies in 2021, the surviving spouse is eligible for this exemption for 2021 as well as for 2022.

Learn more about declaring when an owner of the property is deceased.

Property is in a trust created for a minor by a will

When a testamentary trust has been established by a deceased parent or guardian for the benefit of their minor child, the trustee of the trust is exempt from this tax as long as the child is a minor.

If the trust has more than one beneficiary, all beneficiaries must meet the requirements in the legislation.

Example: A parent passes away and leaves their investment property in Lantzville, B.C. in trust for their minor child. The trustee of this trust would be exempt for every year up to and including the year the child turned 19.

Property is in a trust for the benefit of a charity

Some charities (including many churches) place the ownership of their residential property into a trust. The trustee of a trust created for this purpose is exempt for this property.

If the trust has more than one beneficiary, all beneficiaries must meet the requirements in the legislation.

Property is a strata hotel

Owners of a strata accommodation property as defined in the Assessment Act, also called strata hotels, are exempt. This exemption was introduced as a temporary exemption but was made permanent in 2022; it is now available for the 2018 and subsequent tax years.

Taxpayers who believe their properties qualify as "strata accommodation properties" should contact BC Assessment for more information. 

Property includes a licensed child daycare

Properties that include a licensed and operating daycare for children are exempt from the speculation and vacancy tax.

Property is only accessible by water

Properties that have water access and are more than 100 meters from an existing road are exempt from the speculation and vacancy tax. 

Exclusions from the tax

  • Property has an assessed value under $150,000
  • Property includes a building that is divided into four or more apartments for rental and is not stratified
  • Property includes a building that is used as a bunkhouse, cookhouse, nursing home, rest home or group home
  • Property owner is a registered charity
  • Property owner is a co-operative
  • Property owner is a municipality
  • Property owner is an Indigenous Nation trustee
  • Property owner is a government or related entity
  • Property owner is a regional district or similar body, as defined in legislation

Contact us if you believe you should be excluded from the tax under one of these circumstances.

Phased-out exemptions

The exemptions below were available to property owners in the specific years names, but are no longer available. 

No residence on the property (2018 and 2019 tax years only)

Properties that have no residence on them can claim this exemption for 2018 and 2019 tax years only.

This exemption was available for the first two years of the speculation and vacancy tax to give owners of vacant land time to begin development on the property or to reclassify the land if necessary.

Example: In 2018, an owner buys a vacant lot in Nanaimo with plans to build a home on it later. They qualify for this exemption in the 2018 tax year and if the property is still without a residence, this exemption is available for the 2019 tax year. 

Property has rental restrictions (2018, 2019, 2020 and 2021 tax years only)

When a covenant or a strata bylaw prevents the property from being rented out to qualify for a rental exemption, all owners of the property are exempt for the 2018, 2019, 2020 and 2021 tax years only. 

This only applies if the rental restriction was in place on or before October 16, 2018, and the owner also purchased the property before that date. 

Example: A B.C. resident purchases a strata property in August 2018 as an investment, but under the strata bylaws they are not allowed to rent it out. Even if the home is empty, they qualify for this exemption for 2018, 2019, 2020 and 2021, but will have to pay the tax for 2022 if it remains unoccupied. 

Questions?

Contact us to get help with your inquiries about the speculation and vacancy tax.

This information is provided for your convenience and guidance and is not a replacement for the legislation.