2018 B.C. Budget Sets Sight on Housing Affordability

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The B.C. government recently unveiled its 2018 Budget.  One of its key focus was on the province’s housing market.  In an effort to reign in speculation and address housing affordability, the province is set to implement some new taxes, as well as, update some existing ones.  New provincial-federal programs will also be introduced to help close tax loopholes.

Here are 12 main takeaway notes:

  • Beginning fall 2018, the Province will introduce a new speculation tax on residential property. This tax will target foreign and domestic speculators who own residential property in B.C., but don’t pay taxes here, including those who leave their units sitting vacant. The Province will also introduce a non-refundable income tax credit which will allow those who pay income tax in B.C. to offset the property tax.
  • Increasing the foreign buyers tax rate from 15{cae2521f64dcff784c511b644c6cc8c98f9594c79acdd41ba953a724385391e5} to 20{cae2521f64dcff784c511b644c6cc8c98f9594c79acdd41ba953a724385391e5}.
  • Expanding the foreign buyers tax to areas from Metro Vancouver to Capital Regional District, the Fraser Valley, the Central Okanagan and the Nanaimo Regional District.
  • Increasing the property transfer tax to 5{cae2521f64dcff784c511b644c6cc8c98f9594c79acdd41ba953a724385391e5} from 3{cae2521f64dcff784c511b644c6cc8c98f9594c79acdd41ba953a724385391e5} on the fair market value that is over $3 million on residential properties.
  • Increasing the school tax rate on the value of homes over $3 million.
  • Allowing online accommodation providers to apply 8{cae2521f64dcff784c511b644c6cc8c98f9594c79acdd41ba953a724385391e5} PST and up to 3{cae2521f64dcff784c511b644c6cc8c98f9594c79acdd41ba953a724385391e5} municipal regional district tax (MRDT) on short-term rentals.
  • Moving to stop tax evasion in pre-sale condo reassignments by requiring developers to collect and report comprehensive information about the assignment of pre-sale condo purchases. This information will be shared with federal and provincial tax authorities so they can make sure taxes are paid.
  • Taking action to end hidden ownership, including a new beneficial ownership registry to be administered by the Land Title Survey Authority. Additionally, the Province will require additional information about beneficial ownership on the Property Transfer Tax form.
  • Strengthening provincial auditing and enforcement powers. Not only is the province’s Property Transfer Tax Act being amended, but the federal government will also amend the Income Tax Act and the Land Tax Deferment Act to allow improved information sharing to help better identify when people are abusing the property tax deferment program or double-claiming principle residences.
  • Moving to close property tax loopholes on the Agricultural Land Reserve (ALR). The move is to ensure than ALR land is being used for farming and not for investors or mega-mansions.
  • Expanding information collection and information sharing with the federal government to prevent tax evasion. Starting in 2019 the Province will collect Social Insurance Numbers as part of the Homeowner Grant application process.
  • Seeking permanent provincial-federal action to combat money laundering, tax evasion, and avoidance. The Province has also asked the federal government to formalize a multi-agency working group on tax evasion, money-laundering and housing.

If you would like more information on various programs, deductions and credits that can help save you money, contact GB Pilley & Associates Ltd., Chartered Professional Accountants at 604 926 3522.

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2018-02-21T15:16:12+00:00