What you need to know about B.C.'s speculation tax and whether you're exempt

If you're a homeowner in an urban centre in B.C., you may have already received a speculation and vacancy tax letter fromthe provincial government. If not, it's probably on the way.

The tax rate is 0.5 per cent of your home's assessed value, based on property owned Dec. 31, 2018. It will increase for many people next year, but that gets a little more complicated.

And here's the thing: Most people don't have to pay it at all.

It's important not to confuse the provincial tax with Vancouver's empty homes tax, which is similar in some ways In both cases homeowners needto submita declaration to avoid paying the tax but is completely separate. For Vancouverites, the deadline to declare for the municipal empty homes tax is Feb. 4.

Thespeculation and vacancy taxdeclaration is due March 31.

Taxable regions

Not everyone who owns a home in B.C. needs to worry about the speculation and vacancy tax. According to the provincial government, the tax "is a key measure in tackling the housing crisis in major urban centres in British Columbia."

The taxable regions include:

• Municipalities within the Capital Regional District, except Salt Spring Island, Juan de Fuca Electoral Area, and the Southern Gulf Islands.
• Nanaimo
• Metro Vancouver municipalities, exceptBowen Islandand the Village of Lions Bay.
• Abbotsford
• Mission
• Chilliwack
• Kelowna
• West Kelowna
• District of Lantzville

Within these areas, any reserve lands, treaty lands, or self-government First Nations are exempt.

If your home is outside the taxable regions, don't expect to find a declaration letter in your mailbox. This issue isn't about you (or your home).

Some types of ownership exempt

If your home is in one of the affected areas, youstillmay not have to pay the tax.

Is it owned by an Indigenous Nation, a government or public body, a registered charity, or housing co-op? If so, you're exempt. Even some types of not-for-profit organizations can avoid the tax.

If you fall into one of these categories and didn't receive a declaration letter, don't sweat it you're good to go.

If you did receive a letter, but fall into one of these categories, the B.C. government does expectyou to submit the declaration.

How to avoid the tax

OK, you've followed this far and still appear to be facing the tax but not so fast.

According to the provincialgovernment, more than 99 per cent of British Columbianswill be exempt. The government says the tax is designed to "target foreign and domestic speculators who own residences in B.C. but don't pay taxes here."

So, is your residential property your primary home? Great, you're exempt.

Didyou rent out the property for three months or more last year? You're exempt. As of 2019, you'll have to rent out a home that isn't yourprincipalresidence for at least six months to avoid the tax.

That's it, go ahead and fill out your declaration.

Or if you haven't received one by late February, contact the B.C. government at spectaxinfo@gov.bc.ca, or call toll-free: 1-833-554-2323.

If you've failed to qualify for an exemption, and have to fork over 0.5 per cent of your home's assessed value, the B.C. government expects payment by July 2.