BC Speculation and Vacancy Tax Act: Rates, Exemptions, and Filing

The BC Speculation and Vacancy Tax is an annual provincial tax on residential property in designated areas of British Columbia that sits empty rather than being lived in or rented out. Starting with the 2026 tax year, the rate is 1% of assessed value for Canadian citizens and permanent residents, and 3% for foreign owners and untaxed worldwide earners. Every owner of residential property in a taxable area must file a declaration by March 31 each year, even if they qualify for a full exemption.

Where the Tax Applies

The tax covers three groups of areas: the Metro Vancouver Regional District, the Capital Regional District around Victoria, and a list of individually designated municipalities across the rest of the province.

Metro Vancouver coverage includes Vancouver, Burnaby, Surrey, Richmond, Coquitlam, Port Coquitlam, Port Moody, New Westminster, Delta, both Langleys, Maple Ridge, Pitt Meadows, White Rock, both North Vancouvers, West Vancouver, UBC and the University Endowment Lands, and the villages of Anmore and Belcarra. The Capital Regional District takes in Victoria, Saanich, Oak Bay, Langford, Colwood, Esquimalt, Central Saanich, North Saanich, Sidney, View Royal, Sooke, Metchosin, and Highlands.¹

Designated municipalities elsewhere in the province include Kelowna, West Kelowna, Lake Country, Peachland, Penticton, Summerland, Vernon, Coldstream, Kamloops, Salmon Arm, Nanaimo, Lantzville, Parksville, Qualicum Beach, Ladysmith, Duncan, North Cowichan, Lake Cowichan, Abbotsford, Chilliwack, Mission, Squamish, Lions Bay, Courtenay, Comox, and Cumberland.¹

Reserve lands, treaty lands, lands of self-governing Indigenous Nations, and islands reachable only by air or water (other than Vancouver Island) are excluded. The Predator Ridge resort area in Vernon is also carved out.¹

What Property Is Covered

The tax applies to property classified as Class 1 residential under British Columbia’s Assessment Act. That includes detached houses, cottages, strata lots, and apartments within single-family homes, duplexes, and multi-family buildings. Vacant land zoned for residential use is also in scope even if nothing is built on it.

One point catches owners off guard: a house sitting on a farm parcel counts as residential property for this tax, even though the surrounding land is classified as farm. Only farm outbuildings such as barns and equipment sheds are excluded. Property used entirely for commercial purposes falls outside the residential classification.

The 2026 Rates and Who Pays Which

The province doubled the rates for the 2026 tax year. There are now two rates, applied to the property’s assessed value as set by BC Assessment:²

1% for Canadian citizens and permanent residents who are not untaxed worldwide earners.
3% for foreign owners and untaxed worldwide earners.

“Untaxed worldwide earner” describes a household where one spouse lives in Canada and reports relatively little income while the other earns most of the household’s money abroad and does not report that income on a Canadian tax return. The province previously used the term “satellite families” for this arrangement.³

When multiple people own a property, the tax is split by ownership share and calculated at each owner’s own rate. A Canadian citizen co-owning with a foreign national pays 1% on their share; the foreign owner pays 3% on theirs.

How to Qualify for an Exemption

Most owners in a taxable area do not end up paying, because they qualify for one of the exemptions. The declaration is still required.

Living in the Home

Using the property as your principal residence gives you a full exemption. Principal residence means the place where you live for most of the year compared to any other. The address on your income tax return, driver’s licence, and Medical Services Plan registration all help establish that the home is genuinely your primary base.⁴

Renting the Home Out

An owner who does not live in the home can qualify by renting it out for at least six months of the calendar year. The six months do not need to be consecutive, but each tenancy must meet the minimum duration set out in the regulation.⁴

The rental must be arm’s length. Putting a family member on paper as a tenant does not do the job; separate and more restrictive criteria apply when a non-arm’s length occupant such as a relative lives in the home.

Life-Event Exemptions

Several personal circumstances provide temporary relief, and the specifics matter.

When an owner dies, everyone on title at the time of death is exempt for the year of death and the following calendar year. The person managing the estate is also exempt, even if they were not on title.⁴

Separating spouses can claim an exemption on family property if they live apart for at least 90 consecutive days in the calendar year and do not reconcile. If the separation begins less than 90 days before year-end, the exemption starts the following year. A second year is available if the couple has not yet finalized the division of family property and remains apart.⁴

A property undergoing construction or renovation that prevents occupancy is exempt. If a home becomes uninhabitable for at least 60 consecutive days because of a disaster or hazardous condition beyond the owner’s control, it qualifies for an exemption in the year the damage occurs, and potentially the following year if repairs are not done by March 1.⁴

Owners away from home for necessary medical treatment (for themselves, a spouse, or a minor child) can claim an exemption for up to two years for the same condition, with certification from a medical or nurse practitioner that treatment is required and impractical to obtain closer to the principal residence. A separate exemption covers a secondary residence near a treatment facility that the owner periodically occupies for care. Owners who lived in their home before moving into a residential care facility for age, disability, illness, or a similar reason qualify for an exemption for up to two years; the facility must provide daily meals, housekeeping, or nursing care.⁴

Filing the Annual Declaration

Every residential owner in a taxable area must file a declaration each year, even if nothing has changed and even if a full exemption clearly applies. The province mails a declaration letter each January with a Letter ID and Declaration Code in the top right corner. Both are unique to the tax year and are needed to file. The fastest way to declare is through the province’s online portal; a phone line is available for owners who cannot file online. The deadline in either case is March 31.⁵

Every individual on title must declare separately. Corporations, partnerships, and trusts on title also file, and so do life tenants and registered occupiers of a residential property.

Payment and the Default Assessment Trap

If tax is owing after the declaration, payment is due on the first business day in July. For 2026, that is July 2.⁵

Missing the March 31 declaration deadline is where owners get hurt. If you do not declare, the province issues a default assessment at the highest applicable rate for your owner category, and a default assessment caused by not filing cannot be appealed. Unpaid balances accrue interest at the rate set by the province, and penalty and interest rules keep running through postal disruptions, so mail delays are not a defense.

Tax Credit for Owners Reporting BC Income

Owners who would otherwise owe the tax can reduce the bill through a credit tied to British Columbia income reported on a Canadian federal tax return. The credit amount depends on the BC income reported and is not applied automatically; owners must apply through eTaxBC and provide copies of their Canada Revenue Agency Notices of Assessment as proof.⁶

This credit mainly helps foreign owners and untaxed worldwide earners who have begun reporting meaningful income in BC. It reduces the 3% rate only in proportion to income actually reported.

Appealing an Assessment

If the tax, a penalty, or interest was applied incorrectly, you can appeal. The appeal must reach the Minister of Finance within 90 days of the date on the assessment, sent by tracked mail, courier, or fax.⁷

The scope of an appeal is narrow. It reviews whether the law was applied correctly to your facts. It cannot excuse a missed declaration, change the exemption rules, override a BC Assessment property valuation, or cancel a bill because of financial hardship. A default assessment triggered by failing to declare cannot be appealed at all. Errors on a declaration can generally be fixed online rather than through the appeal process.⁷

What U.S. Owners Should Know

U.S. citizens and residents who own residential property in British Columbia and pay this tax face a tough U.S. tax result. Because the SVT is not an income tax, it does not qualify for the U.S. foreign tax credit.⁸

It also cannot be deducted as a foreign property tax on Schedule A. IRS Publication 530 states plainly that foreign taxes paid on real estate are not deductible.⁹

On the reporting side, foreign real estate held directly in your own name is not a specified foreign financial asset and is not reported on Form 8938. If the BC property is held through a foreign corporation, partnership, or trust, your interest in that entity is a reportable asset once your total specified foreign financial assets exceed the applicable threshold.¹⁰

1
Government of British Columbia. Taxable Areas for the Speculation and Vacancy Tax
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Government of British Columbia. Tax Rates for the Speculation and Vacancy Tax
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Government of British Columbia. Terms and Definitions for the Speculation and Vacancy Tax
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Government of British Columbia. Exemptions for Individuals for the Speculation and Vacancy Tax
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Government of British Columbia. Speculation and Vacancy Tax
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Government of British Columbia. Tax Credits for the Speculation and Vacancy Tax
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Government of British Columbia. Can You Appeal?
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Internal Revenue Service. Foreign Tax Credit for Individuals
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Internal Revenue Service. Tax Information for Homeowners
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Internal Revenue Service. Basic Questions and Answers on Form 8938