The new BC budget garnered less attention than usual this year, sandwiched as it was between the announcement new COVID-19 restrictions in BC and the announcement of the Federal Budget. However, BC’s budget contained an important update to the speculation and vacancy tax in BC. This is a different tax than the empty homes tax in Vancouver. The speculation and vacancy tax targets owners of residential properties in certain major urban areas across the province, including Metro Vancouver, Abbotsford, and Kelowna, to name a few..
In the new provincial budget, the Speculation and Vacancy Tax Act has been amended to clarify that if someone has a beneficial interest in a property registered in the name of a trustee of a trust and contingent on the death of another individual, they will no longer be included in the definition of “beneficial owners” for this tax. This means that people who fall under this definition will no longer be charged the tax. This change will most notably affect seniors and spouses of seniors who are home owners in BC. Life interest trusts are commonly used by property owners as part of their end-of-life planning. Previously, this carried with it the risk of incurring the speculation and vacancy tax. Now, home owners in these situations will be exempt.
This amendment harmonizes the definition of “beneficial owner” with the definition in the Land Owner Transparency Act and the Business Corporations Act. Additionally, the amendment is effective retroactively to November 27, 2018.
If you have any questions about how this may effect your interest in property or your end-of-life planning, please reach out to one of the lawyers in our Real Estate Group or our Estate Planning & Litigation Group.