We are fast approaching the deadline for filing your Speculation Tax Declarations for 2022 (which is March 31, 2022 by the way), so we thought we’d touch on spec tax for corporations in BC. Just to start this blog off, we have to say, we are not tax professionals and are not licenced or insured to provide tax advice. If you are needing tax advice, please contact a chartered professional accountant or contact the BC Government help desk.
We would like to discuss corporations who own property in B.C. and would like to declare an exemption as the property is being occupied for a period of at least 6 months of the calendar year.
- IF the property is rented to an arms-length tenant(s) that is NOT a short-term Air BNB style rental, this may qualify for an exemption;
- IF the property is occupied as their principal residence by an individual who is an individual in relation to the owner (this could be a director of the corporation for example), this may qualify for an exemption permitted the following qualifications are met:
- The individual in the property is a corporate interest holder or eligible individual, meaning then have 25% of the issued shares of the corporation or at least 25% of the voting rights of the corporation AND
- can appoint or remove most of the board of directors AND
- can exercise significant influence or control over the corporation AND
- the corporation holds interest in the property as the corporation and not through a partnership or a trust AND
- ALL corporate interest holders are residents of British Columbia
Corporations may want to carefully consider whether they meet all of these requirements before claiming an exemption.
Corporations making their declarations should gather the following information FROM EACH MEMBER of the Corporation before starting their filing:
- Declaration Letter
- Business Number
- Incorporation Number and date of Incorporation
- Name(s), date(s) of birth, citizenship status, social insurance number(s), BC Residency status(es); and
- Percentage of household income reported
We do have to stress that every situation is different and some exemptions may apply, or they may not. It is best to have each particular situations looked at in detail to determine your tax obligations. We have included a link to the spec tax information from the BC Government website:
As always, your friendly neighbourhood lawyers are here for questions/concerns and to guide you through. Please feel free to reach out to us should you wish to chat about Speculation Tax in BC from a legal perspective.
Author: Tracy Lerfold, Designated Paralegal to Jennette Vopicka and Danielle (Dani) Brito
This information is general in nature only and written by a Designated Paralegal under the direct supervision of a lawyer. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (778) 940-3768 or any of our lawyers practicing in the area of corporate law at the following:
Jennette Vopicka: firstname.lastname@example.org
Danielle (Dani) Brito: [email protected]