Many people in Canada buy cottages or coastal homes in different provinces or even countries. In Alberta, it is not uncommon for people to purchase residential real estate in British Columbia for vacationing or retirement purposes. Those who do own such properties should be aware of a new tax levied on empty properties in Lower Mainland, Kelowna, Victoria and Nanaimo, British Columbia.
The new taxes will affect any Alberta resident who owns a property in these parts of B.C. but do not permanently reside in the province and keep their homes empty for part of the year. The speculation tax rate is 2 per cent of the property's assessed value. Those who keep tenants in their properties when they are not there may not need to pay the tax as their homes are not empty.
While it is unclear how many Alberta residents own residential real estate in British Columbia, the Okanagan Real Estate Board says Albertans made up 10.2 per cent of buyers last year in that region. Kelowna, which is covered by the new law, is part of that territory. Experts say the new tax may incentivize buyers from outside the province to purchase property in other parts of the region.
The new tax is a response to high housing prices in British Columbia. The government claims nonresidents are depleting the rental market, and hopes this tax on homeowners from Alberta and other places will help deter this. Those who are looking to purchase or sell residential real estate in Alberta, or who are interested in inter-provincial real estate law, should contact a lawyer for insight.
Source: Calgary - CBC News, "Albertans who own vacation properties in B.C. face new tax", Feb. 23, 2018