Vancouver has some of the lowest municipal property taxes in British Columbia. The actual tax rate varies year to year depending on the needs of the city, and the revenue collected is used to fund public services like schools, police, hospitals and more. However, there are also other taxes that may apply to your property, including the city’s own Vacancy (empty homes) Tax, and the more recently introduced provincial Speculation and Vacancy Tax, both of which may affect you if you don’t live in the property.
Property Taxes in Vancouver
Municipal Property Tax
Each year, property owners in Vancouver are subject to property tax, based on the fair and assessable value of their property. The rate for 2020 is $2.92568 per $1000 of taxable value. So the municipal property tax on a $600,000 property would equal $1755.
Regardless of whether you live in or lease your property, you are required to pay property taxes annually. In order to do so, you must submit a property status declaration, which will determine if you also need to pay the Empty Homes Tax.
Vancouver’s Empty Homes Tax
The Empty Homes Tax was implemented in 2017 to return vacant properties to the rental market, lest they be subject to an additional tax of 1.25% of the property’s fair and assessable value.
This tax only applies to you if you have more than one property (assuming the one you are residing in is your principal residence) and the additional properties are vacant for more than 6 months of the year. Whilst there are some circumstantial exemptions, if you are not living in the house, the Empty Homes tax may indeed apply to your property.
For an in-depth explanation of the empty homes tax in Vancouver please see Vancouver’s Empty Home Tax Explained.
B.C. Speculation and Vacancy Tax
A third property tax- the Speculation and Vacancy tax may also apply to your property in Vancouver if the property is not your primary residence, and is vacant for more than 6 months of the year. According to the B.C. government, the Speculation and Vacancy tax is ‘designed to discourage housing speculation and people from leaving homes vacant in B.C.’s major urban centres,’ like Vancouver.
As such, all property owners in the Metro Vancouver regional district must also complete a provincial property declaration (separate from the declaration required for the Empty Homes tax).
The tax rate itself varies depending upon your residential status. From 2019 onwards, the provincial Speculation and Vacancy tax rates are:
2% of the properties assessable value if you are a foreign owner or satellite family
0.5% for Canadian citizens or permanent residents
Do I Have To Pay Property Taxes in Vancouver if I Don’t Live in the House?
When it comes to which taxes you have to pay, and how much they equate to, it really depends on how you use the property. Regardless of how your property is used, you or whoever is listed on the property title will be subject to the annual municipal property tax.
If the property is leased, or occupied by yourself or your close family, it will not be subject to the additional taxes. However, if your Vancouver property is not listed as your primary residence, and is vacant for 6 months of the year or more, you will also be subject to both the Empty Homes Tax and the B.C. provincial Speculation and Vacancy Tax.
As an example, if you are a Canadian citizen or permanent resident, the tax on a $600,000 property (based on the most current rates) would be:
- Municipal tax = $1755 (as above)
- Empty Homes tax (1.25% of property value) = $7500
- Provincial empty homes tax (0.5% of property value) = $3000
Total annual property tax = $12, 225.
Similarly, if you are not a Canadian citizen or permanent resident, your annual property taxes would be:
- Municipal tax = $1755
- Empty Homes tax (1.25% of property value) = $7500
- Provincial empty homes tax (2% of property value) = $12,000
Total annual property tax = $21, 255
Whilst there are some exemptions to these taxes, they will be applicable in most cases if the property is vacant and is not your primary residence. If you’re unsure whether they will apply to your property, or are interested in acquiring an additional property and want to understand the tax risks, reach out and connect with us.