Despite purchasing a home in B.C. at the beginning of 2018, Darcy Garneau and his partner still meet the criteria of a satellite family and owe money for the speculation and vacancy tax. (Black Press Media file photo)

New B.C. residents not exempt from speculation and vacancy tax

Darcy Garneau has lived and worked in B.C. for over a year but could still owe money to the province

A B.C. man is not exempt from the speculation tax, despite being a Canadian citizen who lives and works in the province.

Darcy Garneau and his partner were working abroad in the United States but bought a home in Victoria in February 2018.

Despite living and working in B.C. for over a year, a lack of Canadian taxes filed in 2017 makes the couple look like a “satellite family” and therefore puts them in the small margin of the B.C. population who owe money for the speculation and vacancy tax.

ALSO READ: Letters on way to all homeowners in B.C. speculation tax communities

The 2018 speculation and vacancy tax rate is 0.5 per cent of a home’s value. This tax can be offset by a tax credit if the person earns a high enough income.

“Our vacancy tax is nearly $5,000 on a property valued at close to $1 million,” Garneau said in an email. “The minimum income I need to earn as an owner occupant of my home in order to realize enough of a tax credit to offset the vacancy tax is $100,000.”

ALSO READ: Bear Mountain rezoned for spec tax exemption, province says no

Luckily, Garneau was able to land a job with a high enough income, but he knows that many others wouldn’t.

“For argument’s sake, let’s say I did not find a job or earned substantially less the $100,000 needed to earn enough tax credits. In that case, I would be paying the vacancy tax even though I am an owner occupant during 2018,” Garneau said. “I can see where this could affect other Canadians who are returning to B.C. as a retiree. They simply would not meet the income requirements needed to avoid the vacancy tax on their owner-occupied home.”

Garneau believes that the nuances of this tax system unfairly targets some people.

“This act discriminates against new immigrants and returning Canadian citizens,” he said.

ALSO READ: Want to avoid the speculation tax on your vacant home? Rent it out, Horgan says

Garneau sought legal expertise and spoke with Scott Gorski, an associate and tax specialist with Borden Ladner Gervais LLP in Vancouver. Gorski agreed that the tax held unfair expectations for new Canadians.

“The problem for new Canadians is that the speculation tax is not just targeting vacant homes. It is also targeting persons with insufficient income for the government’s liking, even where the home is occupied throughout the year,” Gorski said.

“I have personally only seen a couple of cases involving new Canadians struggling with the speculation tax. However, I have seen many people struggling in a variety of ways outside the context of new Canadian residents as well … In my view, this new tax and the declaration system was not as simple or straightforward as the government thinks; a lot of people struggled with it.”

B.C. Minister of Finance Carole James would not speak directly to Garneau’s case, but issued the following statement on the speculation and vacancy tax.

“We are helping make sure people who live and work in B.C. have a place to call home. We’re helping turn vacant properties into homes for people and ensuring foreign owners and satellite families are paying their fair share,” James said. “Our plan is working. Since May, home prices are moderating in all segments of the market. And all revenue raised through the tax will support affordable housing in the local community.”

nicole.crescenzi@vicnews.com


Send a Tweet: @NicoleCrescenzi

Like us on Facebook  

Just Posted

Castaway Wanderers men, women advance to B.C. semifinals

Castaway Wanderers men trounce UVic 59-29 in playoffs

Unattended cooking causes fire in Songhees Nation home

Two people treated for injuries, one transported to hospital Monday evening

Busy Tuesday for BC Ferries passengers

First sailings to and from Swartz Bay sold out

Rain with a high of 16 C for Tuesday

Plus your weekly forecast

Canada Women’s Rugby 7s Team land at home after series triumph

Next stop at Langford offers Olympic qualification

Easter bombings a response to New Zealand attacks, says Sri Lanka minister

The Islamic State group asserted it was responsible for the nine bombings

New commemorative loonie marking ‘progress’ for LGBTQ2 people to be unveiled today

But advocates say it mistakenly suggests equality has been achieved largely as a result of government actions

B.C. VIEWS: NDP’s lawyer show is turning into a horror movie

Court actions pile up over pipelines, car insurance, care aides

United Way opens grants to help charities tackle social issues

Charities north of the Malahat can apply for grants $2,000 to $20,000

POLL: How often does your family use BC Ferries?

Navigating the lineups for BC Ferries is a way of life for… Continue reading

Crime Stoppers most wanted for Greater Victoria for the week of April 16

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

Sri Lanka invokes war-time military powers after nearly 300 killed in Easter bombings

Sri Lanka’s minister of tourism says 39 foreign tourists were killed in the Easter Sunday attacks

Man’s body found in popular Cowichan Valley hiking area

Police say death not suspicious after discovery in Stoney Hill area overlooking Saltspring Island

Most Read