The Speculation and Vacancy Tax in Greater Victoria: Who Pays, What Just Changed, and the December Date That Decides It

Two things about the speculation and vacancy tax catch people out, and they are not the ones you would expect.

The first is that you have to declare whether or not you owe anything. Over 99 percent of BC residents end up exempt, and every one of them still has to file a declaration every year. Miss it and the province does not assume you were exempt. It issues an assessment at the maximum rate and leaves you to sort it out.

The second is that the rate went up for 2026, and 2026 is nearly over. For a Canadian citizen or permanent resident who owes the tax, it doubled. How you used the property this year, and who is on title on 31 December, decides a bill you declare by 31 March 2027 and pay the following July. There are about three months left to affect that outcome, and after 31 December there are none.

The rate, and what just changed

The tax is charged on the property's assessed value.

2018              0.5 percent on all properties subject to the tax
2019 to 2025      2 percent    foreign owners and untaxed worldwide earners
                  0.5 percent  Canadian citizens and permanent residents
2026              3 percent    foreign owners and untaxed worldwide earners
                  1 percent    Canadian citizens and permanent residents
2027 onward       4 percent    foreign owners and untaxed worldwide earners
                  1 percent    Canadian citizens and permanent residents

"Untaxed worldwide earner" is the province's own term and it has a specific definition, which is set out on the province's terms page linked at the foot of this article. If you are not sure which side of it you fall on, that is a question for your accountant, not for a website.

There is a credit that offsets the tax for BC residents who are Canadian citizens or permanent residents and are not untaxed worldwide earners. It was capped at $2,000 for the 2018 to 2025 years and rises to $4,000 from 2026. In both cases that happens to cover the tax on the first $400,000 of assessed value exactly, so the credit is not keeping pace with the rate so much as moving with it.

What it costs here

At Greater Victoria assessed values, for an owner who is not exempt:

For 2027, the foreign owner column goes up again. On that $1,200,000 property it becomes $48,000 a year.

Everyone on title declares, separately

This is the mechanical trap. When a property has more than one owner, each person on title makes their own declaration. A spouse does not cover you. A relative does not cover you. A business partner does not cover you.

Declaration letters go out in January and February, and the deadline is 31 March. The declaration covers how you used the property during the previous calendar year, so the one you file by 31 March 2027 is about 2026.

If no declaration arrives, the province issues a Notice of Assessment. You are then arguing your way back from a bill rather than avoiding one.

Where it applies, and the parts people get wrong

The tax covers 59 communities in BC. On Vancouver Island the designated taxable areas are Courtenay, Duncan, Nanaimo, Parksville, Comox, Ladysmith, Lake Cowichan, Qualicum Beach, Cumberland, Lantzville and North Cowichan.

In the Capital Regional District they are Victoria, Saanich, Oak Bay, Esquimalt, View Royal, Colwood, Langford, Central Saanich, North Saanich, Sidney, Sooke, Highlands and Metchosin.

Metchosin and Highlands are the two that surprise people. They are rural, they are nothing like downtown Victoria, and they are in.

Three categories sit outside the taxable areas. Reserve lands, treaty lands and the lands of self governing Indigenous Nations are not part of them. Neither are islands accessible only by air or water, with Vancouver Island itself the stated exception. And the Predator Ridge resort in Vernon is specifically carved out.

That second rule is the one that matters locally. The Gulf Islands have no road connection, which is what puts them outside the taxable areas rather than any special treatment. Before relying on that for a specific address, check it on the province's own map, because the boundary is drawn by the regulation and not by what looks obvious from a ferry schedule. The short term rental rules run the other way on this. Salt Spring Island and Gabriola are both on the list of communities where the principal residence requirement applies, so an island can sit outside this tax and inside the short term rental rules at the same time. Which communities those cover is set out separately.

The exemptions most people use

There are more than 20 exemptions. These are the ones that cover almost everybody.

Principal residence. Available to an owner who is a Canadian citizen or permanent resident, a BC resident for income tax purposes, and not an untaxed worldwide earner. If you have more than one home, you can only claim it on the one where you live longest in the calendar year.

Tenanted. If a tenant occupies the home for at least six months in the calendar year, the owner may qualify. There are specific tenancy requirements attached to it, including for a tenant who is not at arm's length.

The year you bought it. A property bought in the year is exempt for that year where the buyer paid property transfer tax, or qualified for an exemption from it such as the first time home buyers' or newly built home exemption.

Owner in care. Up to two years after an owner moves into residential care, where they lived in the home before.

Death of an owner. The year of death and the calendar year immediately following it.

There are also extensions of the principal residence exemption for an owner away receiving necessary medical treatment, for spouses living apart for work or medical reasons, and for members of the Canadian Armed Forces away on service.

The exemptions that matter if you are building

This is the part almost nobody writes about, and it is the part that decides whether a development site costs you anything to hold.

Construction or renovation. A property qualifies where a residence on it cannot be occupied for a period of 90 days in the calendar year because of construction or renovation, or where there is no residence yet because the build has not got that far. The condition is that reasonable steps are being taken without undue delay to develop or renovate the property.

That last clause is the whole exemption. It is not enough to own a vacant lot or an empty house and intend to build. You have to be moving. And the province expects you to keep records of progress, time invested and costs, because this one can be audited.

Heritage conservation. Where a residence that is part of a heritage property could not be occupied for at least 90 days in the calendar year because of work undertaken to protect, preserve or enhance it.

Phased developments. For a multi unit residential development built in phases across two or more properties, where reasonable steps are being taken without undue delay to develop one of them. It does not apply if a residence could have been occupied for 180 days in that calendar year.

Vacant new inventory. A newly constructed residence owned by the developer of the property, offered for sale to the public that calendar year, and not yet occupied as a home.

If you are holding a house you intend to demolish, or a lot you intend to build on, the question is not whether you own a development site. It is whether you can show reasonable steps without undue delay, with records to back it. A file that sat still all year is the one that generates a bill.

The calendar

all year         how the property is used is what the exemptions turn on
31 December      ownership on this date is what the tax applies to
Jan and Feb      declaration letters mailed
31 March         declaration deadline, covering the previous calendar year
early July       payment due

What to do before 31 December

If you own a property in a taxable area that is not your principal residence and is not tenanted, work out now which exemption you expect to rely on for 2026, because most of them depend on what happened during the year rather than what you say in March.

If you are relying on the six month tenancy exemption, count the months honestly. Six months in the calendar year is the test, and a tenancy that started in August does not get there.

If you are relying on a construction or renovation exemption, go and find the records. Permits, invoices, contractor correspondence, dates. If the file has been quiet, the time to restart it is now, not in March when you are filling in the declaration.

And if you are buying or selling in a taxable area before year end, the completion date matters more than usual this year, because ownership on 31 December is what the tax attaches to and the rate it attaches at is the new one.

FAQ

Sources

• Speculation and vacancy tax, Province of British Columbia:
• Tax rates:
• Tax credits:
• Taxable areas:
• How to declare:
• Exemptions for individuals:
• Land under development exemptions:
• Terms and definitions:

Rates, thresholds, dates and exemption conditions verified against the above on 1 October 2026. Rates and rules have changed more than once since this tax was introduced, so confirm the current year's figures on the province's own pages before you rely on them. This page is general information about how the tax works, not legal, tax or accounting advice.