Speculation and vacancy tax credit for other owners

Speculation and vacancy tax credits help reduce the amount of tax payable if you aren’t eligible for an exemption. A non-refundable tax credit may be available for owners who are either:

Find out:

If you’re a B.C. resident and this credit doesn’t apply to you, you may be eligible for the tax credit for B.C. residents.

Am I eligible?

To claim the non-refundable tax credit for non-B.C. residents, you must have submitted a declaration and meet both of the following qualifications:

  • You or your spouse reported B.C. income to the Canada Revenue Agency (CRA)

  • You're a:

    • Canadian citizen but reside outside of B.C., or
    • Foreign owner or member of a satellite family

If you’re a corporation or trust, you can claim this tax credit for non-B.C. residents if:

  • You’re a corporation with no corporate interest holders
  • You’re a corporation with corporate interest holders but one or more of the corporate interest holders is:
    • a Canadian citizen but resident in another province for tax purposes
    • not a Canadian citizen, or
    • a member of a satellite family
  • You’re a trustee and one or more of the beneficial owners of the trust is:
    • a Canadian citizen but resident in another province for tax purposes
    • not a Canadian citizen, or
    • a member of a satellite family

Properties held by a business partnership aren’t eligible for this tax credit.

You may apply for the tax credit as soon as you receive your Notice of Assessment. 

How is this tax credit calculated?

Your tax credit amount is calculated based on your (or, if applicable, your spouse's) reported B.C. income and whether you used the property for an eligible use.

Reported B.C. income

To claim this tax credit, you or your spouse must have B.C. income that’s been reported to the CRA for income tax purposes.

You can use B.C. income from the same year as the speculation and vacancy tax year (which is the year PRIOR to the year you complete your declaration), plus the two previous years. You don’t need to have B.C. income reported in all three years to apply for the tax credit.

However, you cannot use B.C. income from a period before 2017 or B.C. income that was previously used to reduce your speculation and vacancy tax liability.

For example, when you apply for the tax credit for the 2018 speculation and vacancy tax year, your B.C. income balance (or, if applicable, your spouse's B.C. income balance) can be B.C. income reported in 2018 and 2017.

When you apply for the tax credit for the 2019 speculation and vacancy tax year, your B.C. income balance (or, if applicable, your spouse's B.C. income balance) can be B.C. income reported in 2017, 2018 and 2019 if it has not been used in a previous year to reduce your speculation and vacancy tax liability. 

Where can I find this income?

If you were subject to B.C. income tax and were not subject to income tax in another province, report your B.C. income from Line 236 from your T1 Personal Income and Benefit Return.

If you earned income in multiple provinces, report your B.C. income from line 5219 (52190 in 2019) of your Form 2203 (Provincial and Territorial Taxes) attached to your T1 Personal Income Tax and Benefit Return.

If you’re a corporation that only has a permanent establishment in B.C., report the amount from line 300 of the T2 Corporation income tax return.

If you’re a corporation that earned income in multiple provinces, use this formula to calculate your B.C. income:

Total taxable income attributed to B.C. from Schedule 5: Tax Calculation Supplementary – Corporations

÷ (divided by)

The corporation’s total taxable income

x (times)

The amount on line 300 of the T2 Corporation Income Tax Return

 

The tax credit amount depends on the residency of the trust. 

If you’re the only trustee who’s a resident of B.C. for income tax purposes but is eligible for a tax credit, report the trust’s net income from Line 50 from the trust's T3 Income Tax and Information Return.

For trusts that are subject to tax in multiple provinces, report your B.C. income from Column 4 of Line 6920 of Form T3MJ (T3 Provincial and Territorial Taxes Income Tax) attached to the trust's T3 Income Tax and Information Return.

If there is more than one trustee associated with the trust, only one trustee can use the trust income to claim the tax credit.

 

Can I transfer income?

You can combine the B.C. income balances you and your spouse reported to increase your tax credit amount. This is called a spousal transfer of income.

If you are on title and do not have B.C. income, your spouse can transfer their B.C. income to you, even if they are not on title. 

To use your spouse’s income:

  • You must provide a copy of their Notice of Assessment from the CRA when you apply for the tax credit

  • You and your spouse must complete and sign the Spousal Transfer of Income Authorization (FIN 561)(PDF) form when you apply for the tax credit. By completing and signing this form, your spouse authorizes you to use their income and agrees to the transfer for your tax credit application.

The spouse transfer of income can only be used by individuals. It can't be used to offset tax for property held in trust for another person or for property held by a corporation.

Trusts and corporations may not transfer income to trustees, corporate interest holders or their spouses for their personal use. If you’re a trust and you have multiple trustees, only one of those trustees may use the B.C. income earned by the trust in the year. Trust income cannot be split between trustees.

Eligible use of property

When you start the tax credit application process, you'll see a list of eligible use options to choose from to indicate how your property is used. The eligible use options are similar to the exemption options when you completed your declaration.

The option you choose will be used with your B.C. income balance to determine your tax credit amount. 

In the 2018 tax year, if your property wasn't eligible for one of the eligible use options, you wouldn’t be granted the tax credit.

For 2019 and later, if your property isn’t being used in one of the eligible ways, you may still qualify for a tax credit based on your B.C. income balance. This doesn’t apply if you’re already assessed at the lowest tax rate of 0.5%

Determining your tax credit amount – an eligible use applies

If your property is used in an eligible way, depending on your B.C. income balance, your tax payable may be reduced. 

Your tax payable can be found on your speculation and vacancy tax Notice of Assessment.

Your tax credit amount will be the lesser of:

  • Your tax payable for that property
  • Your tax credit balance (B.C. income balance x 10 x tax rate)

For 2019 and subsequent years, the tax rate is:

Since this is a non-refundable tax credit, if your tax credit amount is greater than the tax you owe, your tax liability becomes $0.

Example:

As of December 31, 2019, a foreign owner has 100% ownership of a property assessed at $525,000. The owner lived on the property but couldn’t claim the principal residence exemption because foreign owners can’t claim that exemption. They reported $40,000 in B.C. income to the CRA in both 2018 and 2019, for a total B.C. income balance of $80,000. The owner has received their speculation and vacancy tax Notice of Assessment and is liable for the tax of $10,500. 

When the owner applies for the tax credit, they choose ‘principal residence’ as the eligible use option.

The following calculation is used to determine their tax credit balance:

  • B.C. income balance x 10 x tax rate = tax credit balance
  • $80,000 x 10 x 2% = $16,000

The speculation and vacancy tax payable ($10,500) is less than the tax credit balance ($16,000), therefore the tax credit amount is $10,500, reducing tax payable to $0.

  • Tax payable – tax credit amount = total tax payable
  • $10,500 - $10,500 = $0

As all the B.C. income balance was not used to reduce the amount payable for the 2019 tax year to $0, the remainder ($16,000 – $10,500 = $5,500) will be carried forward and can be used for the 2020 tax year.

Determining your tax credit amount – an eligible use doesn’t apply

If your property isn’t eligible for one of the eligible use options, and you aren’t already assessed at the 0.5% tax rate, you may still be eligible for a tax credit based on your B.C. income balance.

Your tax payable can be found on your speculation and vacancy tax Notice of Assessment.

Your tax credit amount will be the lesser of:

Example:

As of December 31, 2019 a foreign owner has 100% ownership of a property assessed at $995,000. The property is used occasionally and was not eligible for any exemptions. They reported $45,000 in B.C. income to the CRA in both 2018 and 2019, for a total B.C. income balance of $90,000. The owner has received their speculation and vacancy tax Notice of Assessment and is liable for tax of $19,900. 

The owner is not eligible for any of the eligible use options; however, because they have reported B.C. income, they may still be able to reduce their tax payable.  

The following calculation is used to determine their tax credit balance:

The tax credit amount will be the lesser of:

  • 75% of their tax payable ($14,925)
  • Tax credit balance (B.C. income balance x 10 x tax rate (2%)) ($18,000)

75% of the tax payable amount is the lesser amount; therefore the tax credit amount is $14,925, reducing the tax payable to $4,975.

  • Tax payable – tax credit amount = total tax payable
  • $19,900 – $14,925 = $4,975

How do I apply?

You can apply for this tax credit after you’ve submitted your declaration and received your speculation and vacancy tax Notice of Assessment.

To apply, you will need to enrol for eTaxBC to receive a username and password if you don’t already have one. To enrol, you will need your Account Number and Letter ID shown on your Speculation and Vacancy Tax Notice of Assessment. 

Follow these steps to enrol:

  1. Click “enrol now” found under “Enrol - Create an eTaxBC username
  2. Choose “Access an Existing Account”
  3. Select “Speculation and Vacancy Tax” from the drop-down list
  4. Enter your Account Number from your Notice of Assessment
  5. Enter the Letter ID from your Notice of Assessment
  6. Follow the instructions to create a user name and password. You will also be required to enter other details and create a secret question to be used if you forget your password.
  7. A confirmation email will be sent to you. You can then enter your username and password to log onto eTaxBC and access the Tax Credit Application. Follow the steps below on how to access the Tax Credit Application and apply for the tax credit.

Once you’ve enrolled, to apply for the tax credit:

  1. Log on to your eTaxBC account
  2. Select “Speculation and Vacancy Tax” listed under Accounts
  3. Select the appropriate speculation and vacancy tax year (period). If you don’t see the period, select View Periods to show all periods
  4. Select Access Tax Credit Application under I Want To
  5. Select Submit or change my tax credit application listed under I Want To
  6. Complete the form by: 
    1. Choosing the property and selecting the option that reflects how you use your property. If none of the options are applicable, choose “none apply to me”. If you have more than one property, ensure you complete this step for each property. 
    2. Entering your reported B.C. income information on the applicable tab for each income tax year and attach a copy of your income tax Notice of Assessment from the CRA for each tax year you have indicated income for. 
    3. Indicating if you or your spouse are transferring B.C. income. 
    4. If your spouse is transferring their income amount to you, attaching the Spousal Transfer of Income Authorization Form (FIN 561)(PDF) and your spouse’s applicable income tax Notice of Assessment from the CRA.
  7. Review and Submit

​Once you’ve submitted your application, you’ll receive a confirmation number and a revised Notice of Assessment will be issued to you. 

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