2018 Legislative Session: 3rd Session, 41st Parliament

FOR REPORT

The following electronic version is for informational purposes only.

The printed version remains the official version.

Certified correct as amended in Committee of the Whole on the 22nd day of November, 2018

Kate Ryan-Lloyd, Acting Clerk of the House

HONOURABLE CAROLE JAMES

MINISTER OF FINANCE AND DEPUTY PREMIER

BILL 45 – 2018

BUDGET MEASURES IMPLEMENTATION (SPECULATION AND VACANCY TAX) ACT, 2018

Contents

Part 1 –

Interpretation, Special Rules and Application of Act

Division 1 –

Definitions

Definitions

Meaning of "beneficial owner"

Meaning of "corporate interest holder"

Meaning of "partnership interest holder"

Meaning of "untaxed worldwide earner"

Division 2 –

Interpretation and Special Rules

References in Act and regulations

Owner treated as separate person in certain circumstances

Determining owner's interest in residential property

Rules relating to residential property

Rules relating to principal residence of spouses

Provincial nominees

Arm's length dealings

Division 3 – Application of Act

Application of Act

Part 2 – Imposition of Tax

Tax on value of residential property

Highest tax rate

Intermediate tax rate

Lowest tax rate

Tax rate applicable if no declaration filed

Tax rate applicable for 2018 calendar year

Part 3 – Exemptions from Tax

Division 1 – Exemptions for Certain Owners

Exemption for specified owners

Exemption for not-for-profit corporations

Exemption for bankrupts

Exemption for Indigenous nations

Division 2 – Exemptions for Certain Residential Property

Exemption for hazardous or damaged residential property

Exemption for daycares

Exemption for residential property without a residence – 2018 calendar year

Exemption for strata accommodation properties – 2018 and 2019 calendar years

Division 3 – Exemptions Relating to Principal Residence

Definitions

Principal residence exemption – general

Principal residence exemption – person with disabilities

Principal residence exemption – other

Residence exempt despite residing in residential care facility

Residence exempt despite extended medical absence

Residence exempt despite extended absence

Additional residential property exempt – certain spouses

Division 4 – Exemptions for Tenanted Residential Property

Definitions and

interpretation

Tenancy exemption for widely held owners

Tenancy exemption for specified owners

Tenancy exemption for other owners

Division 5 – Exemptions for Residential Property Under Construction or Renovation

Definitions

Exemption for vacant residential property – construction or renovation

Exemption for vacant heritage property – conservation

Exemption for phased developments of residential property

Exemption for vacant new inventory

Division 6 – Exemptions for Certain Circumstances

Additional residential property exempt – medical reason

Exemption on death

Exemption on testamentary trust

Exemption in year of acquisition – as a consequence of death

Exemption in year of acquisition – other

Exemption on breakdown of marriage or common-law partnership

Exemption for restricted rentals – 2018 and 2019 calendar years

Part 4 – Tax Credits

Definitions and

interpretation

Amalgamations

Tax credit for resident of British Columbia

Tax credit for eligible taxpayer

Tax credit balance

BC income balance

Transfer of BC income balance to spouse

Deductions from BC income balance

BC income

Filing requirements – tax credit for eligible taxpayer

Part 5 – Administration and Enforcement

Division 1 – Declarations

Annual declaration

Declaration required on demand

Form and contents of declaration

Division 2 – Assessments

Definitions

Examination of declaration and resulting assessment

Assessments – general rules

Consequential assessments – income taxes

Consequential assessments – person with disabilities

Consequential assessments – changes under the Assessment Act

Consequential reassessments after appeal

Other assessments – disposition of appeal

Assessments of other amounts payable

Assessments of penalties and interest

Rules relating to assessments

Notice of assessment

Anti-avoidance rule

Division 3 – Payment of Tax and Excess Refund

Payment of tax

Excess refund

Division 4 – Administrative Penalties

Late payment penalty

Penalty for failure to provide required information

Penalties respecting information and records

Gross negligence

Misrepresentation by third party

Waiver or cancellation of penalty

Division 5 – Interest

Interest on unpaid taxes

Interest on excess refund

Interest on penalties

Calculation of interest

No interest if full payment within 30 days

Waiver or cancellation of interest

Division 6 – Refunds

Refund of overpayment

Division 7 – Inspections and Audits

Inspection and audit powers

Requirement to provide records

Demand for information

Records required to be kept

Evidence – copies of records

Part 6 – Appeals

Appeal to minister

Appeal to court

Irregularities

Tax collection not affected by pending appeal

If decision set aside or amount reduced or increased on appeal

Part 7 – Recovery of Amounts Owing

Division 1 – Joint and Several Liability

Definition of "defaulting owner"

Joint and several liability

Joint and several liability – other owners

Joint and several liability – parents or guardians of minor

Joint and several liability – property not transferred at arm's length

Joint and several liability – assessment and discharge of liability

Joint and several liability – refunds

Division 2 – Other Methods of Recovery

Court proceeding to recover amount owing

Summary proceedings

Alternative remedies

Attachment of funds

Lien

Notice of enforcement proceedings

Limitation period

Part 8 – General

Designation of administrator

Delegation

Extension of time

Communication of information

Information-sharing agreements

How and when documents are given by administrator

Proof of receipt

How and when documents are given by minister

When payment is received

When documents given to minister

Procedure and evidence

Access to records

Part 9 – Offences

General offences

Offences for failure to provide records or information required by administrator or for interference

Penalties

Offences in relation to confidential information

Offence by corporation

Administrative penalties as alternative to offence proceedings

Limitation period for prosecution

Section 5 of Offence Act

Part 10 – Regulations

General regulation-making authority

Other regulations

Part 11 – Review of Act and Regulations

Review of Act and regulations

Part 12 – Transitional Provisions, Amendments to This Act and Consequential Amendments

Division 1 – Transitional Provisions

Transitional regulations

Division 2 – Amendments to This Act

141-149

Amendments to this Act

Division 3 – Consequential Amendments

150-158

Consequential Amendments

Commencement

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Part 1 –

Interpretation, Special Rules

and Application of Act

Division 1 –

Definitions

Definitions

1 In this Act:

"administrator" means the person designated under

section 117 by the minister to administer this Act;

"apartment" means a self-contained residential accommodation unit that has cooking, sleeping, bathroom and living room facilities;

"assessed value" means the assessed value determined under the Assessment Act ;

"assessment" , in relation to an assessment under this Act, includes a reassessment;

"assessment roll" has the same meaning as in

section 1 (1) of the Assessment Act ;

"beneficial owner" , in relation to an interest in a residential property, means an individual who is, in respect of the interest, a beneficial owner within the meaning of

section 2 [meaning of "beneficial owner"] ;

"class 1 property" means property that is assessed as property in the class 1 property class under the Assessment Act ;

"class 9 property" means land that is assessed as property in the class 9 property class under the Assessment Act ;

"corporate interest holder" , in relation to a corporation, means an individual who is, in respect of the corporation, a corporate interest holder within the meaning of

section 3 [meaning of "corporate interest holder"] ;

"declaration" means a declaration required to be filed under

section 62 [annual declaration] or 63 [declaration required on demand] ;

"declaration due date" , in relation to filing a declaration under

section 62 for a calendar year, means, as applicable,

(

a) March 31 in the year following the calendar year, or

(

b) if the date referred to in paragraph (

a) is extended by the administrator under

section 119 [extension of time] , the later date;

"federal Act" means the Income Tax Act (Canada);

"improvements" has the same meaning as in the Assessment Act ;

"income taxation year" has the same meaning as "taxation year" in

section 249 (1) of the federal Act;

"Indigenous nation" means any of the following:

(

a) a band as defined in

section 2 (1) of the Indian Act (Canada);

(

b) the Nis g a'a Nation;

(

c) a Nis g a'a Village;

(

d) the Sechelt Indian Band established by

section 5 (1) of the Sechelt Indian Band Self-Government Act (Canada);

(

e) the Sechelt Indian Government District established by the Sechelt Indian Band Self-Government Act (Canada);

(

f) a treaty first nation;

(

g) the Westbank First Nation as defined in the agreement approved under the Westbank First Nation Self-Government Act (Canada);

(

h) a prescribed Indigenous entity;

"land" has the same meaning as in

section 1 (1) of the Assessment Act ;

"medical practitioner" includes a person authorized to practise medicine in another jurisdiction;

"minor" has the same meaning as in the Age of Majority Act ;

"non-arm's length tenant" has the meaning given to it in

section 36 (1) [definitions and

interpretation] ;

"owner" , except in a reference to a beneficial owner, means a person who is one of the following:

(

a) a registered owner of the estate in fee simple of a residential property, unless the registered owner has disposed of the registered owner's interest to a person referred to in paragraph (b), (

c) or (d);

(

b) a registered holder of the last registered agreement for sale of a residential property;

(

c) a life tenant under a registered life estate in a residential property;

(

d) a registered occupier of a residential property;

"owner's interest" means the owner's interest in a residential property determined under

section 8 [determining owner's interest in residential property] ;

"parcel" has the same meaning as in

section 1 (1) of the Assessment Act ;

"partnership interest holder" , in relation to an interest in a residential property that is partnership property and is registered in the name of a partner in a partnership, means an individual who is, in respect of the interest in the residential property, a partnership interest holder within the meaning of

section 4 [meaning of "partnership interest holder"] ;

"permanent resident of Canada" means an individual who is a permanent resident as defined in

section 2 (1) of the Immigration and Refugee Protection Act (Canada);

"person with disabilities" means any of the following:

(

a) an individual who is designated as a person with disabilities under

section 2 (2) [persons with disabilities] of the Employment and Assistance for Persons with Disabilities Act ;

(

b) an individual who is considered to be disabled under

section 42 (2) of the Canada Pension Plan ;

(

c) an individual who is entitled to a deduction under

section 118.3 (1) of the federal Act, or would have been entitled to that deduction if that

section were read without reference to paragraph (

c) of that section;

"principal residence" means, subject to

section 10 (1) [rules relating to principal residence of spouses] , the place in which an individual resides for a longer period in a calendar year than any other place;

"property" has the same meaning as in

section 1 (1) of the Assessment Act except in

(

a) the definition of "unreported income" in

section 5 (1) [meaning of "untaxed worldwide earner"] ,

(

b) section 53 (c) [amalgamations] , and

(

c) section 114 [lien] ;

"property class" has the same meaning as in

section 1 (1) of the Assessment Act ;

"provincial nominee" means an individual who is named in a valid nomination certificate issued by the government in accordance with an agreement referred to in

section 8 (1) of the Immigration and Refugee Protection Act (Canada) between the government and Canada;

"registered" means registered in the books of the land title office;

"registered occupier" means a person who is in possession of property under a registered lease and in whose name the property is assessed under

section 26, 27 or 28 of the Assessment Act ;

"residence" means any of the following:

(

a) a detached house, cottage or other single family dwelling;

(

b) a dwelling that is a strata lot;

(

c) an apartment in

(

i) a single family dwelling,

(ii) a dwelling that is a strata lot, or

(iii) a duplex or other multi-family dwelling;

"resident of British Columbia" , in relation to a calendar year, means an individual who

(

a) is, for the calendar year, a specified Canadian citizen or specified permanent resident of Canada, and

(

b) is, for the income taxation year of the individual that ends at the end of the calendar year, either

(

i) resident only in British Columbia for the purposes of the federal Act, or

(ii) deemed, under

section 2607 of the Income Tax Regulations (Canada), to have been resident in British Columbia for the purposes of the federal Act,

but does not include an individual who is, for the income taxation year of the individual that ends at the end of the calendar year, deemed not to be a resident of Canada for the purposes of the federal Act;

"residential property" , in relation to a calendar year, means any of the following property as assessed on an assessment roll for the calendar year:

(

a) a parcel or portion of a parcel of land that is class 1 property if there are no improvements on the parcel of land;

(

b) a parcel or portion of a parcel of land that is class 1 property, together with any improvement or portion of an improvement that is class 1 property;

(

c) improvements or portions of improvements, other than farm outbuildings as defined in

section 1 of the Home Owner Grant Act , that are

(

i) class 1 property, and

(ii) on a parcel or portion of a parcel of land that is class 9 property;

(

d) improvements or portions of improvements that are

(

i) class 1 property, and

(ii) assessed separately from the parcel or portion of a parcel of land under the improvements,

but does not include

(

e) property the assessed value of which is equal to or less than $150 000, or

(

f) prescribed land or improvements, or both;

"specified area" means any of the following:

(

a) a municipality within the Capital Regional District;

(

b) a municipality, other than the Village of Lions Bay, within the Metro Vancouver Regional District;

(

c) the City of Abbotsford;

(

d) the City of Chilliwack;

(

e) the City of Kelowna;

(

f) the City of Nanaimo;

(

g) the City of West Kelowna;

(

h) the District of Lantzville;

(

i) the District of Mission;

(

j) that part of Electoral Area A within the Metro Vancouver Regional District that comprises the University of British Columbia and University Endowment Land as defined in

section 1 of the University Endowment Land Act ;

(

k) a prescribed area,

but does not include any of the following:

(

l) an island, if any, within an area referred to in paragraphs (

a) to (j), if the island is usually accessible only by air or water throughout a calendar year;

(

m) a prescribed area within that is all or part of an area referred to in paragraphs (

a) to (j);

(

n) subject to the regulations, any of the following:

(

i) a reserve as defined in

section 2 (1) of the Indian Act (Canada);

(ii) Nis g a'a Lands;

(iii) Nis g a'a Fee Simple Lands as defined in the

Definitions

Chapter of the Nis g a'a Final Agreement;

(iv) Sechelt lands as defined in

section 2 (1) of the Sechelt Indian Band Self-Government Act (Canada);

(

v) treaty lands of a treaty first nation;

(vi) Other Maa-nulth First Nation Lands as defined in the

Definitions

Chapter of the Maa-nulth First Nations Final Agreement;

(vii) Other Tla'amin Lands as defined in the

Definitions

Chapter of the Tla'amin Final Agreement;

(viii) Other Tsawwassen Lands as defined in the

Definitions

Chapter of the Tsawwassen First Nation Final Agreement;

"specified Canadian citizen" , in relation to a calendar year, means an individual who is a Canadian citizen other than a Canadian citizen who is, for the calendar year, an untaxed worldwide earner;

"specified permanent resident of Canada" , in relation to a calendar year, means an individual who is a permanent resident of Canada other than a permanent resident of Canada who is, for the calendar year, an untaxed worldwide earner;

"spouse" , except in

section 50 [exemption on breakdown of marriage or common-law partnership] , has the same meaning as "cohabiting spouse or common-law partner" in

section 122.6 of the federal Act;

"tax" means tax imposed under this Act;

"trust" includes an estate;

"trustee" includes a personal representative;

"untaxed worldwide earner" , in relation to a calendar year, means an individual who is, for the calendar year, an untaxed worldwide earner within the meaning of

section 5 [meaning of "untaxed worldwide earner"] .

Meaning of "beneficial owner"

2 Subject to the exclusions, if any, in the regulations, an individual is a beneficial owner in respect of an interest in a residential property registered in the name of a trustee of a trust if any of the following apply:

(

a) the individual has a beneficial interest in respect of the interest in the residential property;

(

b) the individual has the power to revoke the trust and receive the interest in the residential property;

(

c) the individual is a corporate interest holder in a corporation that has

(

i) a beneficial interest in respect of the interest in the residential property, or

(ii) the power to revoke the trust and receive the interest in the residential property;

(

d) the individual has a prescribed interest in respect of the interest in the residential property.

Meaning of "corporate interest holder"

(1) Subject to the exclusions, if any, in the regulations, an individual is a corporate interest holder in respect of a corporation if any of the following apply:

(

a) the individual has legal or beneficial ownership or control, directly or indirectly, of

(

i) shares of the corporation representing 25% or more of the value of the equity of that corporation, or

(ii) 25% or more of the voting rights in respect of the corporation;

(

b) the individual has the right, directly or indirectly, to appoint or remove from office the majority of the board of directors of the corporation;

(

c) the individual has the right to exercise or does exercise, under a unanimous shareholders' agreement or otherwise, significant influence or control over the corporation;

(

d) the individual has a prescribed right or interest in relation to the corporation.

(2) For the purposes of subsection (1) (

a) or (b), a direct or indirect interest, power or right includes an interest, power or right that an individual has

(

a) alone,

(

b) together with one or more persons with common interests, or

(

c) through

(

i) a corporation,

(ii) a trustee of a trust,

(iii) a personal or legal representative,

(iv) an agent, or

(

v) any other intermediary.

Meaning of "partnership interest holder"

4 Subject to the exclusions, if any, in the regulations, an individual is a partnership interest holder in relation to an interest in a residential property registered in the name of a partner in a partnership if the interest in the residential property is partnership property and either of the following applies:

(

a) the individual has an interest, as a partner in the partnership, in the interest in the residential property;

(

b) the individual is a corporate interest holder in respect of a corporation

(

i) that is a partner in the partnership, and

(ii) that has an interest, as a partner in the partnership, in the interest in the residential property.

Meaning of "untaxed worldwide earner"

(1) In this section:

"assessment" has the same meaning as in

section 248 (1) of the federal Act;

"reported total income" , in relation to an individual for a calendar year, means the total of the following amounts each of which is applicable to the individual for an income taxation year of the individual that ends in the immediately preceding calendar year:

(

a) if the individual has been assessed under

Part I of the federal Act for the income taxation year, the amount described on the assessment as the individual's total income for the purposes of line 150 of a return for that income taxation year;

(

b) if the individual has filed a return for the income taxation year but an assessment has not been issued to the individual under

Part I of the federal Act, the amount the individual reported as the individual's total income for the purposes of line 150 of a return for that income taxation year;

(

c) if the individual is, at any time in the income taxation year, resident in Canada for the purposes of the federal Act, is not required to file a return and has not filed a return, the amount the individual would be required to report as the individual's total income for the purposes of line 150 of a return for the income taxation year if the individual were to file a return for that income taxation year;

(

d) if the individual is not, at any time in the income taxation year, resident in Canada for the purposes of the federal Act, is not required to file a return and has not filed a return, nil;

(

e) if the individual is required to file a return under the federal Act for the income taxation year but has not filed a return for that income taxation year, nil;

"return" means a return of income for the purposes of

Part I of the federal Act;

"unreported income" , in relation to an individual for a calendar year, means the total of all amounts the individual earns or realizes in any manner inside or outside Canada, including amounts earned or realized from the disposition of property, if the amounts

(

a) are earned or realized in the immediately preceding calendar year, and

(

b) have not been reported in respect of the individual for the purposes of the federal Act,

but does not include an amount expended to earn or realize those amounts.

(2) For the purposes of the definition of "unreported income", a reference to an amount is a reference to money, rights or things expressed in terms of the amount of money or the value in terms of money of the right or thing, unless the money, right or thing is prescribed.

(3) The following rules apply for the purposes of this section:

(

a) an individual who is not subject to taxation under

Part I of the federal Act must determine the individual's income taxation year as if the individual were subject to taxation under

Part I of the federal Act;

(

b) the calculation of an individual's reported total income and unreported income is not affected by

section 7 [owner treated as separate person in certain circumstances] .

(4) An individual is an untaxed worldwide earner for a calendar year if

(

a) the total of the individual's unreported income for the calendar year and the unreported income for the calendar year of any spouse of the individual

is greater than

(

b) the total of the individual's reported total income for the calendar year and the reported total income for the calendar year of any spouse of the individual.

Division 2 –

Interpretation and Special Rules

References in Act and regulations

(1) Except in this Part, a reference in this Act and the regulations to a residential property is a reference to a residential property located wholly or partly within a specified area.

(2) Unless a contrary intention appears, a reference in this Act and the regulations to an owner of a residential property in relation to a calendar year is a reference to a person who is an owner of the residential property at the end of the last day of the calendar year.

(3) Unless a contrary intention appears, a reference in this Act and the regulations to a person who is the spouse of an individual in relation to a calendar year is a reference to a person who is the spouse of that individual at the end of the last day of the calendar year.

(4) A reference in this Act and the regulations to an assessment roll in relation to a calendar year is a reference to an assessment roll that, under the Assessment Act , is completed for the immediately following calendar year.

Owner treated as separate person in certain circumstances

(1) If an owner holds an interest in a residential property for a calendar year as a partner in a partnership, this Act and the regulations apply to the owner for the calendar year as if

(

a) the owner were a separate person in respect of any interest in a residential property held by the person other than as a partner in a partnership, and

(

b) the owner were a separate person in respect of each partnership in which the owner is a partner.

(2) If an owner holds an interest in a residential property for a calendar year as a trustee of a trust, this Act and the regulations apply to the owner for the calendar year as if

(

a) the owner were a separate person in respect of any interest in a residential property held by the person other than as a trustee of a trust, and

(

b) the owner were a separate person in respect of each trust for which the owner is a trustee.

Determining owner's interest in residential property

(1) If only one owner holds an interest in a residential property at the end of the last day of a calendar year, the owner's interest in the residential property for the calendar year is the entire interest.

(2) If 2 or more owners each hold an interest in a residential property at the end of the last day of a calendar year, each owner's interest in the residential property for the calendar year is determined as follows:

(

a) owners who are joint tenants are considered to have equal interests in the residential property;

(

b) owners who are tenants in common are considered to have one of the following, as applicable:

(

i) the interest specified on the title to the residential property, in the registered agreement for sale or in the registered lease;

(ii) if no interest is specified in an instrument referred to in subparagraph (i), equal interests.

Rules relating to residential property

(1) For the purposes of this Act, the administrator may treat 2 or more residential properties as a single residential property for a calendar year if all of the following apply:

(

a) each of the residential properties is within a specified area;

(

b) the residential properties are contiguous;

(

c) the residential properties are owned by the same person or persons;

(

d) on the first day of the calendar year, one of the residential properties includes a residence;

(

e) the residential properties are used for the residence or for purposes ancillary to or in conjunction with the residence.

(2) For the purposes of determining whether a residential property located wholly or partly within a specified area is subject to tax for a calendar year, the administrator may, in the circumstances set out in subsection (3), consider whether a residential property located wholly outside a specified area would be subject to tax for the calendar year if the residential property were located within a specified area.

(3) Subsection (2) applies in the following circumstances:

(

a) the residential property located wholly or partly within a specified area is contiguous to the residential property located wholly outside the specified area;

(

b) the residential property located wholly or partly within the specified area is owned by the same person or persons as the residential property located wholly outside the specified area;

(

c) on the first day of the calendar year, either the residential property located wholly or partly within the specified area or the residential property located wholly outside the specified area includes a residence.

(4) For the purposes of this section, a residential property is considered to include a residence on the first day of a calendar year and to be used for a residence, or for purposes ancillary to or in conjunction with the residence, if

(

a) a residence that is part of the residential property is, in the immediately preceding calendar year, substantially damaged or destroyed as contemplated by

section 24 [exemption for hazardous or damaged residential property] , and

(

b) because of the substantial damage or destruction, the residential property does not include a residence on the first day of the calendar year.

(5) For the purposes of this section, a residential property is considered to include a residence on the first day of a calendar year and to be used for a residence, or for purposes ancillary to or in conjunction with the residence, if

(

a) building activity, as defined in

section 40 [definitions] , has started or is continuing in relation to a residence being constructed or placed on the residential property, and

(

b) because of the stage of the building activity, the residential property does not include a residence on the first day of the calendar year.

Rules relating to principal residence of spouses

(1) Subject to this section, if an individual and a person who is, for a calendar year, the individual's spouse each have a separate principal residence for the calendar year, for the purposes of this Act, the spouses are considered to have only one principal residence between them for the calendar year, determined as follows:

(

a) the principal residence of the spouses for the calendar year is the residence

(

i) that would, but for this section, be the principal residence of one of the spouses for the calendar year, and

(ii) that is designated for the calendar year by each spouse in the form and manner required by the administrator;

(

b) if no residence is designated for the calendar year by the spouses or each spouse designates a different residence for the calendar year, the principal residence of the spouses for the calendar year is the residence designated by the administrator.

(2) An individual and a person who is, for a calendar year, the individual's spouse may each be considered to have a separate principal residence for the calendar year if

(

a) the spouses live separate and apart to enable one of them to carry on business or work in a particular location, and

(

b) either of the following applies:

(

i) the principal residence of one spouse is located on Vancouver Island and the principal residence of the other spouse is not;

(ii) the distance between the principal residence of the spouse carrying on business or working in the particular location referred to in paragraph (

a) and that particular location is at least 100 km less than the distance between the principal residence of the other spouse and that particular location.

(3) An individual and a person who is, for a calendar year, the individual's spouse may each be considered to have a separate principal residence for the calendar year

(

a) if, in the opinion of a medical practitioner, one of the spouses has a health condition the ongoing management of which requires that spouse to reside in a different residence from the other spouse, and

(

b) if an owner of the residential property that includes the principal residence of the spouse with the health condition files, with a declaration, a document that is completed by the medical practitioner.

(4) The document completed by the medical practitioner must be

(

a) filed in the manner required by the administrator, and

(

b) in the form and contain the information required by the administrator.

Provincial nominees

(1) For the purposes of this Act, an individual who becomes a provincial nominee in a calendar year and the individual's spouse, if any, are deemed to be residents of British Columbia at the end of the last day of the calendar year if, at that time, the individual is

(

a) a provincial nominee,

(

b) a Canadian citizen, or

(

c) a permanent resident of Canada.

(2) The individual and the individual's spouse, if any, are deemed to be residents of British Columbia at the end of the last day of the calendar year immediately following the calendar year referred to in subsection (1) if, at that time, the individual is

(

a) a provincial nominee,

(

b) a Canadian citizen, or

(

c) a permanent resident of Canada.

Arm's length dealings

(1) Sections 251 and 252 of the federal Act apply for the purposes of this Act.

(2) In applying

section 251 of the federal Act for the purposes of this Act, subsection (1) of that

section is to be read as if paragraph (

b) were excluded.

Division 3 – Application of Act

Application of Act

13 This Act applies to calendar years beginning on or after January 1, 2018.

Part 2 – Imposition of Tax

Tax on value of residential property

14 An owner of a residential property must, for a calendar year, pay tax to the government in the amount determined by the following formula:

tax payable = tax rate x (owner's interest x assessed value)

where

tax rate

the tax rate applicable under

section 15, 16, 17, 18 or 19 to the owner for the calendar year;

owner's interest

the owner's interest in the residential property, expressed as a percentage;

assessed value

the assessed value of the residential property determined on July 1 of the calendar year.

Highest tax rate

(1) For the purposes of

section 14, a tax rate of 2% is applicable for a calendar year to an owner of a residential property unless

section 16 (1) or 17 (1) applies to the owner for the calendar year.

(2) Without limiting subsection (1), a tax rate of 2% is applicable to an owner of a residential property if the owner is a corporation in respect of which there are no corporate interest holders.

Intermediate tax rate

(1) For the purposes of

section 14, a tax rate of 1% 0.5% is applicable for a calendar year to an owner of a residential property to whom this subsection applies unless

section 17 (1) applies to the owner for the calendar year.

(2) Subsection (1) applies to an owner, other than an owner whose interest in the residential property is held as a partner in a partnership or as a trustee of a trust, if the owner

(

a) is an individual who is, at the end of the last day of the calendar year, a specified Canadian citizen or a specified permanent resident of Canada, or

(

b) is a corporation in respect of which all of the corporate interest holders are, at the end of the last day of the calendar year, specified Canadian citizens or specified permanent residents of Canada.

(3) Subsection (1) applies to an owner whose interest in the residential property is held as a partner in a partnership if, at the end of the last day of the calendar year,

(

a) all of the partnership interest holders in respect of the interest in the residential property are specified Canadian citizens or specified permanent residents of Canada, and

(

b) none of the partners in the partnership is

(

i) a corporation in respect of which there are no corporate interest holders, or

(ii) a partnership.

(4) Subsection (1) applies to an owner whose interest in the residential property is held as a trustee of a trust if all of the beneficial owners in respect of the interest in the residential property are, at the end of the last day of the calendar year, specified Canadian citizens or specified permanent residents of Canada.

Lowest tax rate

(1) For the purposes of

section 14, a tax rate of 0.5% is applicable for a calendar year to an owner of a residential property to whom this subsection applies.

(2) Subsection (1) applies to an owner, other than an owner whose interest in the residential property is held as a partner in a partnership or as a trustee of a trust, if the owner

(

a) is an individual who is a resident of British Columbia at the end of the last day of the calendar year, or

(

b) is a corporation in respect of which all of the corporate interest holders are residents of British Columbia at the end of the last day of the calendar year.

(3) Subsection (1) applies to an owner whose interest in the residential property is held as a partner in a partnership if, at the end of the last day of the calendar year,

(

a) all of the partnership interest holders in respect of the interest in the residential property are residents of British Columbia, and

(

b) none of the partners in the partnership is

(

i) a corporation in respect of which there are no corporate interest holders, or

(ii) a partnership.

(4) Subsection (1) applies to an owner whose interest in the residential property is held as a trustee of a trust if, at the end of the last day of the calendar year, all of the beneficial owners in respect of the interest in the residential property are residents of British Columbia.

Tax rate applicable if no declaration filed

18 Despite sections 15, 16 and 17, for the purposes of

section 14, a tax rate of 2% is applicable for a calendar year to every owner of a residential property who fails to file a declaration for the calendar year.

Tax rate applicable for 2018 calendar year

19 Despite sections 15, 16, 17 and 18, for the purposes of

section 14, a tax rate of 0.5% is applicable to every owner of a residential property for the 2018 calendar year.

Part 3 – Exemptions from Tax

Division 1 – Exemptions for Certain Owners

Exemption for specified owners

20 An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if the owner is one of the following at the end of the last day of the calendar year:

(

a) a registered charity as defined in

section 248 (1) of the federal Act;

(

b) an association as defined in

section 1 (1) of the Cooperative Association Act ;

(

c) a municipality;

(

d) the government;

(

e) an agent of the government;

(

f) an Indigenous nation;

(

g) an organization included in the government reporting entity as defined in

section 1 (1) of the Budget Transparency and Accountability Act ;

(

h) a government body as defined in

section 1 of the Financial Administration Act ;

(

i) a local public body as defined in

Schedule 1 [Definitions] of the Freedom of Information and Protection of Privacy Act ;

(

j) a body referred to in

Schedule 2 [Public Bodies] of the Freedom of Information and Protection of Privacy Act ;

(

k) a corporation owned by a municipality;

(

l) a corporation owned by a regional district;

(

m) a corporation owned by an Indigenous nation;

(

n) a corporation incorporated or continued by an enactment;

(

o) a prescribed person or entity or a person or entity in a prescribed class of persons or entities.

Exemption for not-for-profit corporations

21 An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if both of the following apply:

(

a) the owner is, at the end of the last day of the calendar year, a not-for-profit corporation whose interest in the residential property is held other than as a partner in a partnership or as a trustee of a trust;

(

b) during the calendar year, the residential property is primarily used for a prescribed purpose.

Exemption for bankrupts

(1) An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if the owner is, at the end of the last day of the calendar year, a person whose interest in the residential property is held as a trustee in bankruptcy.

(2) An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if the owner's interest in the residential property is vested in a trustee in bankruptcy

(

a) for a period of at least 60 consecutive days in the calendar year, or

(

b) at the end of the last day of that calendar year.

Exemption for Indigenous nations

23 An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if the owner is, at the end of the last day of the calendar year, a person whose interest in the residential property is held as a trustee of a trust for the benefit of an Indigenous nation.

Division 2 – Exemptions for Certain Residential Property

Exemption for hazardous or damaged residential property

(1) In this section:

"hazardous condition" , in relation to a residence that is part of a residential property, means

(

a) a structural component of the residence, including, without limitation, the roof, the foundation, external walls, interior supporting walls, floors and staircases, is defective or damaged,

(

b) oil, gas or another poisonous or dangerous substance is present in the residence, or

(

c) any other condition relating to the residence that is hazardous to the health or safety of its occupants;

"disaster" means

(

a) an earthquake,

(

b) a fire,

(

c) a flood,

(

d) a landslide,

(

e) a spill or leakage of oil, gas or another poisonous or dangerous substance, or

(

f) any other natural disaster or dangerous event.

(2) A residential property is exempt from tax for a calendar year if all of the following apply:

(

a) in the calendar year, a residence that is part of the residential property

(

i) becomes uninhabitable because it is substantially damaged or destroyed by a disaster, or

(ii) becomes uninhabitable because the residence is in a hazardous condition;

(

b) the disaster or hazardous condition was caused by circumstances beyond the reasonable control of an owner of the residential property;

(

c) the residence remains uninhabitable for a period of at least 60 consecutive days in the calendar year.

(3) The residential property is exempt from tax for the calendar year immediately following the calendar year referred to in subsection (2) if the residence that is part of the residential property is not repaired or replaced, as the case may be, to the extent that the residence can be inhabited before March 1 in the calendar year immediately following the calendar year referred to in subsection (2).

Exemption for daycares

(1) In this section:

"care" has the same meaning as in

section 1 of the Community Care and Assisted Living Act ;

"child" has the same meaning as in

section 1 of the Community Care and Assisted Living Act ;

"community care facility" has the same meaning as in

section 1 of the Community Care and Assisted Living Act .

(2) A residential property is exempt from tax for a calendar year if the residential property is, on October 31 of the calendar year, used as a child daycare other than a daycare that

(

a) is operated out of a residence that is part of the residential property, and

(

b) is not a community care facility licensed under the Community Care and Assisted Living Act to provide care to a child.

Exemption for residential property without a residence –

2018 calendar year

26 A residential property is exempt from tax for the 2018 calendar year if, on the date this Act receives First Reading in the Legislative Assembly, the residential property does not include a residence or any part of an improvement that is intended to be a residence.

Exemption for strata accommodation properties –

2018 and 2019 calendar years

(1) In this section, "strata accommodation property" has the same meaning as in

section 19 (1) of the Assessment Act .

(2) A residential property is exempt from tax for the 2018 and 2019 calendar years if the residential property is a strata accommodation property on an assessment roll for the applicable calendar year.

Division 3 – Exemptions Relating to Principal Residence

Definitions

28 In this Division:

"eligible individual" , in relation to an owner of a residential property for a calendar year, means any of the following:

(

a) an individual who is a corporate interest holder in respect of a corporation that is an owner of the residential property if

(

i) the corporation holds the interest in the residential property other than as a partner in a partnership or as a trustee of a trust, and

(ii) all of the corporate interest holders in respect of the corporation are residents of British Columbia at the end of the last day of the calendar year;

(

b) an individual who is a partnership interest holder in respect of an interest in the residential property if

(

i) the owner of the residential property who holds the interest in the residential property holds the interest as a partner in a partnership,

(ii) all of the partnership interest holders in respect of the interest in the residential property are residents of British Columbia at the end of the last day of the calendar year, and

(iii) none of the partners in the partnership is a corporation in respect of which there are no corporate interest holders or a partnership;

(

c) an individual who is a beneficial owner in respect of an interest in the residential property if

(

i) the owner of the residential property who holds the interest in the residential property holds the interest as a trustee of a trust, and

(ii) all of the beneficial owners in respect of the interest in the residential property are residents of British Columbia at the end of the last day of the calendar year;

"eligible owner" , in relation to a residential property for a calendar year, means an owner of the residential property if the owner is an individual

(

a) whose interest in the residential property is held other than as a partner in a partnership or as a trustee of a trust,

(

b) who is a resident of British Columbia at the end of the last day of the calendar year, and

(

c) who is not, on the last day of the calendar year, a minor living with the minor's parent or guardian in a residence that is part of the residential property.

Principal residence exemption – general

29 An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if a residence that is part of the residential property is, for the calendar year, the principal residence of one of the following:

(

a) the owner, if the owner is an individual who is an eligible owner;

(

b) an individual who is, for the calendar year, an eligible individual in relation to the owner.

Principal residence exemption – person with disabilities

(1) A residential property is exempt from tax for a calendar year if a residence that is part of the residential property is, for the calendar year, the principal residence of a person who is a person with disabilities at any time in that calendar year.

(2) A designation made under

section 10 (1) [rules relating to principal residence of spouses] does not apply for the purposes of this section.

Principal residence exemption – other

(1) Subject to subsection (2), an owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if all of the following apply:

(

a) a residence that is part of the residential property is, for the calendar year, the principal residence of one of the following:

(

i) the owner, if the owner is an individual who would have been an eligible owner had the individual been a resident of British Columbia at the end of the last day of the calendar year;

(ii) an individual who would have been an eligible individual in relation to the owner for the calendar year if

(

A) the individual been a resident of British Columbia at the end of the last day of the calendar year, and

(

B) the owner is an owner who would have been an owner referred to in paragraph (a), (

b) or (

c) of the definition of "eligible individual" and in respect of whom all of the applicable requirements would have been met had an individual referred to in clause (

A) not ceased residing in British Columbia before the end of the last day of the calendar year;

(

b) the individual referred to in paragraph (a) (

i) or (ii), as applicable, ceases to reside in British Columbia before the end of the last day of the calendar year;

(

c) the individual referred to in paragraph (a) (

i) or (ii), as applicable, would have been a resident of British Columbia at a time in the calendar year before the individual ceased residing in British Columbia if residency were, for the purposes of the federal Act, determined at that time.

(2) Subsection (1) does not apply for a calendar year to an owner of a residential property in respect of the owner's interest in the residential property if

(

a) the owner was exempt under this

section in respect of the residential property for a calendar year immediately preceding the calendar year, and

(

b) the owner was not exempt under

section 29 [principal residence exemption – general] in respect of the residential property for any calendar year since the last calendar year for which the owner was exempt under this section.

Residence exempt despite residing in residential care facility

(1) In this section, "residential care facility" means a facility in which an individual resides primarily because of age, disability, addiction, illness, frailty or other prescribed circumstances if, in the facility, services are available to the residents, including, without limitation, any of the following:

(

a) daily meals;

(

b) housekeeping;

(

c) nursing care.

(2) Subject to this section, an owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if both of the following apply:

(

a) the owner was previously exempt under

section 29 [principal residence exemption – general] in respect of the residential property for a calendar year specified in subsection (4) because a residence that is part of the residential property was, for the specified calendar year, the principal residence of one of the following:

(

i) the owner, if the owner is an individual who was an eligible owner for that specified calendar year;

(ii) an individual who was an eligible individual in relation to the owner for that specified calendar year;

(

b) the owner does not qualify for an exemption under

section 29 in respect of the residential property for the calendar year because the same individual in respect of whom the owner was previously exempt under

section 29 for the specified calendar year resides in a residential care facility for a longer period in the calendar year than any other place.

(3) Subject to this section, an owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if all of the following apply:

(

a) the owner is, for the calendar year, one of the following:

(

i) an individual who is an eligible owner;

(ii) an owner referred to in paragraph (a), (

b) or (

c) of the definition of "eligible individual" and in respect of whom all of the requirements set out in the applicable paragraph are met;

(

b) a residence that is part of the residential property was, for a calendar year specified in subsection (4), the principal residence of one of the following:

(

i) the owner, if the owner is an individual who would have been an eligible owner for the specified calendar year had the individual been a resident of British Columbia at the end of the last day of that specified calendar year;

(ii) an individual who would have been an eligible individual in relation to the owner for the specified calendar year had the individual been a resident of British Columbia at the end of the last day of that specified calendar year;

(

c) the owner was not previously exempt under

section 29 in respect of the residential property for the specified calendar year because the individual referred to in paragraph (b) (

i) or (ii), as applicable, was not a resident of British Columbia at the end of the last day of that specified calendar year;

(

d) the owner does not qualify for an exemption under

section 29 in respect of the residential property for the calendar year because the same individual referred to in paragraph (b) (

i) or (ii), as applicable, resides in a residential care facility for a longer period in the calendar year than any other place.

(4) For the purposes of this section, the following calendar years are specified:

(

a) the calendar year immediately preceding the calendar year referred to in subsection (2) or (3), as applicable;

(

b) if the owner was exempt in respect of the residential property under one of the following provisions for the period comprising the calendar year immediately preceding the calendar year referred to in subsection (2) or (3), or for the period comprising 2 or more consecutive calendar years immediately preceding that calendar year, the calendar year immediately preceding the applicable period:

(

i) this section;

(ii)

section 24 [exemption for hazardous or damaged residential property] ;

(iii)

section 33 [residence exempt despite extended medical absence] ;

(iv)

section 34 [residence exempt despite extended absence] ;

(

v) section 41 [exemption for vacant residential property – construction or renovation] ;

(vi)

section 42 [exemption for vacant heritage property – conservation] .

(5) Subsections (2) and (3) do not apply for a calendar year to an owner of a residential property in respect of the owner's interest in the residential property if

(

a) the owner was exempt under this

section in respect of the residential property for the 2 calendar years immediately preceding the calendar year,

(

b) the owner was exempt under this

section in respect of the residential property for a total of 2 calendar years preceding the calendar year and was not exempt under

section 29 in respect of the residential property for any calendar year since the last calendar year for which the owner was exempt under this section, or

(

c) in respect of the individual who resides in a residential care facility for a longer period in the calendar year than any other place, the owner is, for the calendar year, exempt under this

section in respect of the owner's interest in a different residential property.

(6) For the purpose of determining whether this

section applies in relation to a calendar year before the 2018 calendar year, the following rules apply:

(a) subsection (2) (

a) and (

b) is to be read as if the references to "was previously exempt" were references to "could have been previously exempt";

(b) subsection (3) (

c) is to be read as if the reference to "was not previously exempt" were a reference to "could not previously have been exempt";

(c) subsection (4) (

b) is to be read as if the reference to "was exempt" were a reference to "could have been exempt".

Residence exempt despite extended medical absence

(1) In this section, "medical reason" , in relation to an individual for a calendar year, means participation in a course of treatment

(

a) that, in the opinion of a medical practitioner, is required for the health of the individual, and

(

b) that is impractical for the individual to obtain in reasonably close proximity to the residence that would, but for the absence contemplated by this section, be the principal residence of the individual for the calendar year.

(2) Subject to this section, an owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if both of the following apply:

(

a) the owner was previously exempt under

section 29 [principal residence exemption – general] in respect of the residential property for a calendar year specified in subsection (4) because a residence that is part of the residential property was, for the specified calendar year, the principal residence of one of the following:

(

i) the owner, if the owner is an individual who was an eligible owner for that specified calendar year;

(ii) an individual who was an eligible individual in relation to the owner for that specified calendar year;

(

b) the owner does not qualify for an exemption under

section 29 in respect of the residential property for the calendar year because the same individual in respect of whom the owner was previously exempt under

section 29 for the specified calendar year resides, for a medical reason related to

(

i) that individual,

(ii) a person who is, for the calendar year, the spouse of that individual, or

(iii) a person who is the child of that individual and, at any time in the calendar year, a minor,

in a location other than the residence referred to in paragraph (

a) of this subsection for a longer period in the calendar year than any other place.

(3) Subject to this section, an owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if all of the following apply:

(

a) the owner is, for the calendar year, one of the following:

(

i) an individual who is an eligible owner;

(ii) an owner referred to in paragraph (a), (

b) or (

c) of the definition of "eligible individual" and in respect of whom all of the requirements set out in the applicable paragraph are met;

(

b) a residence that is part of the residential property was, for a calendar year specified in subsection (4), the principal residence of one of the following:

(

i) the owner, if the owner is an individual who would have been an eligible owner for the specified calendar year had the individual been a resident of British Columbia at the end of the last day of that specified calendar year;

(ii) an individual who would have been an eligible individual in relation to the owner for the specified calendar year had the individual been a resident of British Columbia at the end of the last day of that specified calendar year;

(

c) the owner was not previously exempt under

section 29 in respect of the residential property for the specified calendar year because the individual referred to in paragraph (b) (

i) or (ii), as applicable, was not a resident of British Columbia at the end of the last day of that specified calendar year;

(

d) the owner does not qualify for an exemption under

section 29 in respect of the residential property for the calendar year because that same individual referred to in paragraph (b) (

i) or (ii), as applicable, resides, for a medical reason related to

(

i) that individual,

(ii) a person who is, for the calendar year, the spouse of that individual, or

(iii) a person who is the child of that individual and, at any time in the calendar year, a minor,

in a location other than the residence referred to in paragraph (

b) of this subsection for a longer period in the calendar year than any other place.

(4) For the purposes of this section, the following calendar years are specified:

(

a) the calendar year immediately preceding the calendar year referred to in subsection (2) or (3), as applicable;

(

b) if the owner was exempt in respect of the residential property under one of the following provisions for the period comprising the calendar year immediately preceding the calendar year referred to in subsection (2) or (3), or for the period comprising 2 or more consecutive calendar years immediately preceding that calendar year, the calendar year immediately preceding the applicable period:

(

i) this section;

(ii)

section 24 [exemption for hazardous or damaged residential property] ;

(iii)

section 34 [residence exempt despite extended absence] ;

(iv)

section 41 [exemption for vacant residential property – construction or renovation] ;

(

v) section 42 [exemption for vacant heritage property – conservation] .

(5) Subsections (2) and (3) do not apply for a calendar year to an owner of a residential property in respect of the owner's interest in the residential property if

(

a) the owner was exempt under this

section in respect of the residential property and in respect of the same medical reason for the 2 calendar years immediately preceding the calendar year,

(

b) both of the following apply:

(

i) the owner was exempt under this

section in respect of the residential property and in respect of the same medical reason for a total of 2 calendar years preceding the calendar year;

(ii) the owner was not exempt under

section 29 in respect of the residential property for any calendar year since the last calendar year for which the owner was exempt under this

section in respect of the residential property for the medical reason referred to in subparagraph (i), or

(

c) in respect of the individual who resides in a location other than the residence referred to in subsection (2) (

a) or (3) (b), as applicable, for a longer period in the calendar year than any other place, the owner is, for the calendar year, exempt under this

section in respect of a different residential property.

(6) For the purposes of determining whether this

section applies in relation to a calendar year before the 2018 calendar year, the following rules apply:

(a) subsection (2) (

a) and (

b) is to be read as if the references to "was previously exempt" were references to "could have been previously exempt";

(b) subsection (3) (

c) is to be read as if the reference to "was not previously exempt" were a reference to "could not previously have been exempt";

(c) subsection (4) (

b) is to be read as if the reference to "was exempt" were a reference to "could have been exempt".

(7) In order to claim an exemption under this section, the owner referred to in subsection (2) or (3), as applicable, must file, with a declaration, a document that is completed by a medical practitioner.

(8) The document that is completed by the medical practitioner must be

(

a) filed in the manner required by the administrator, and

(

b) in the form and contain the information required by the administrator.

Residence exempt despite extended absence

(1) Subject to this section, an owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if both of the following apply:

(

a) the owner was previously exempt under

section 29 [principal residence exemption – general] in respect of the residential property for a calendar year specified in subsection (3) because a residence that is part of the residential property was, for the specified calendar year, the principal residence of one of the following:

(

i) the owner, if the owner is an individual who was an eligible owner for that specified calendar year;

(ii) an individual who was an eligible individual in relation to the owner for that specified calendar year;

(

b) the owner does not qualify for an exemption under

section 29 in respect of the residential property for the calendar year because the same individual in respect of whom the owner was previously exempt under

section 29 for the specified calendar year resides in a location other than the residence referred to in paragraph (

a) of this subsection for a longer period in the calendar year than any other place.

(2) Subject to this section, an owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if all of the following apply:

(

a) the owner is, for the calendar year, one of the following:

(

i) an individual who is an eligible owner;

(ii) an owner referred to in paragraph (a), (

b) or (

c) of the definition of "eligible individual" and in respect of whom all of the requirements set out in the applicable paragraph are met;

(

b) a residence that is part of the residential property was, for a calendar year specified in subsection (3), the principal residence of one of the following:

(

i) the owner, if the owner is an individual who would have been an eligible owner for the specified calendar year had the individual been a resident of British Columbia at the end of the last day of that specified calendar year;

(ii) an individual who would have been an eligible individual in relation to the owner for the specified calendar year had the individual been a resident of British Columbia at the end of the last day of that specified calendar year;

(

c) the owner was not previously exempt under

section 29 in respect of the residential property for the specified calendar year because the individual referred to in paragraph (b) (

i) or (ii), as applicable, was not a resident of British Columbia at the end of the last day of that specified calendar year;

(

d) the owner does not qualify for an exemption under

section 29 in respect of the residential property for the calendar year because the same individual referred to in paragraph (b) (

i) or (ii), as applicable, resides in a location other than the residence referred to in paragraph (

b) of this subsection for a longer period in the calendar year than any other place.

(3) For the purposes of this section, the following calendar years are specified:

(

a) the calendar year immediately preceding the calendar year referred to in subsection (1) or (2), as applicable;

(

b) if the owner was exempt in respect of the residential property under one of the following provisions for the period comprising the calendar year immediately preceding the calendar year referred to in subsection (1) or (2), or for the period comprising 2 or more consecutive calendar years immediately preceding that calendar year, the calendar year immediately preceding the applicable period:

(

i) this section;

(ii)

section 24 [exemption for hazardous or damaged residential property] ;

(iii)

section 32 [residence exempt despite residing in residential care facility] ;

(iv)

section 33 [residence exempt despite extended medical absence] ;

(

v) section 41 [exemption for vacant residential property – construction or renovation] ;

(vi)

section 42 [exemption for vacant heritage property – conservation] .

(4) Subsections (1) and (2) do not apply for a calendar year to an owner of a residential property in respect of the owner's interest in the residential property if

(

a) the individual referred to in subsection (1) (a) (

i) or (ii) or (2) (b) (

i) or (ii), as applicable, is absent from the residential property for an extended period in the calendar year because the individual is incarcerated,

(

b) the owner was exempt under this

section in respect of the residential property for one out of the 10 calendar years immediately preceding the calendar year, or

(

c) in respect of the individual who resides in a location other than the residence referred to in subsection (1) (

a) or (2) (b), as applicable, the owner is, for the calendar year, exempt under this

section in respect of a different residential property.

(5) For the purposes of determining whether this

section applies in relation to a calendar year before the 2018 calendar year, the following rules apply:

(a) subsection (1) (

a) and (

b) is to be read as if the references to "was previously exempt" were references to "could have been previously exempt";

(b) subsection (2) (

c) is to be read as if the reference to "was not previously exempt" were a reference to "could not previously have been exempt";

(c) subsection (3) (

b) is to be read as if the reference to "was exempt" were a reference to "could have been exempt".

Additional residential property exempt – certain spouses

(1) An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if all of the following apply:

(

a) the owner is, for the calendar year, one of the following:

(

i) an individual who is an eligible owner;

(ii) an owner referred to in paragraph (a), (

b) or (

c) of the definition of "eligible individual" and in respect of whom all of the requirements set out in the applicable paragraph are met;

(

b) one of the following applies:

(

i) in the case of an owner referred to in paragraph (a) (i), the owner is the spouse of another person for the calendar year;

(ii) in the case of an owner referred to in paragraph (a) (ii), an individual who is an eligible individual in relation to the owner for the calendar year is the spouse of another person for the calendar year;

(

c) because of the application of

section 10 (2) or (3) [rules relating to principal residence of spouses] , the spouses referred to in paragraph (b) (

i) or (ii) of this subsection, as applicable, are each considered to have a separate principal residence for the calendar year;

(

d) a residence that is part of the residential property is, for the calendar year, the principal residence of only one of the spouses referred to in paragraph (b) (

i) or (ii), as applicable.

(2) An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if all of the following apply:

(

a) the owner is, for the calendar year, one of the following:

(

i) an individual who is an eligible owner;

(ii) an owner described in paragraph (a), (

b) or (

c) of the definition of "eligible individual" and in respect of whom all of the requirements set out in the applicable paragraph are met;

(

b) one of the following applies:

(

i) in the case of an owner referred to in paragraph (a) (i), the owner is the spouse of another person for the calendar year;

(ii) in the case of an owner referred to in paragraph (a) (ii), an individual who is an eligible individual in relation to the owner for the calendar year is the spouse of another person for the calendar year;

(

c) but for a designation under

section 10 (1) [rules relating to principal residence of spouses] , the spouses referred to in paragraph (b) (

i) or (ii), as applicable, would each have a separate principal residence for the calendar year;

(

d) a residence that is part of the residential property

(

i) has not been designated for the calendar year as the principal residence of the spouses referred to in paragraph (b) (

i) or (ii), as applicable,

(ii) is, despite the designation of a different residence, the principal residence for the calendar year of one of the spouses referred to in paragraph (b) (

i) or (ii), as applicable, and

(iii) is not, for the calendar year, the principal residence of the other spouse only because that spouse is, for the calendar year, an individual who is

(

A) absent for a reason contemplated in

section 32 [residence exempt despite residing in residential care facility] , 33 [residence exempt despite extended medical absence] or 34 [residence exempt despite extended absence] , and

(

B) exempt in respect of the residential property under a provision referred to in clause (

A) or who would be exempt if the individual were an owner of that residential property.

Division 4 – Exemptions for Tenanted Residential Property

Definitions and

interpretation

(1) In this Division:

"arm's length tenant" , in relation to an owner of a residential property, means, subject to subsection (4), an individual

(

a) who occupies, under a tenancy agreement, a residence that is part of the residential property, and

(

b) who, on the date the tenancy agreement comes into effect, deals at arm's length with the following:

(

i) if the owner of the residential property is an individual whose interest in the residential property is held other than as a partner in a partnership or as a trustee of a trust, the owner;

(ii) if the owner of the residential property is a corporation whose interest in the residential property is held other than as a partner in a partnership or as a trustee of a trust, all of the corporate interest holders in respect of the corporation;

(iii) if the owner of the residential property is a person whose interest in the residential property is held as a partner in a partnership, all of the partnership interest holders in respect of the interest in the residential property;

(iv) if the owner of the residential property is a person whose interest in the residential property is held as a trustee of a trust, all of the beneficial owners in respect of the interest in the residential property,

but does not include an individual described in paragraph (

a) if the owner of the residential property is a person whose interest in the residential property is held as a partner in a partnership in which any of the partners is a partnership;

"non-arm's length tenant" , in relation to an owner of a residential property, means, subject to subsection (5), an individual

(

a) who occupies, for a period of at least one month, a residence that is part of the residential property, and

(

b) who, at any time during a period of occupation, does not deal at arm's length with any of the following:

(

i) if the owner of the residential property is an individual whose interest in the residential property is held other than as a partner in a partnership or as a trustee of a trust,

(

A) the owner, or

(

B) the spouse, if any, of the owner referred to in clause (A);

(ii) if the owner of the residential property is a corporation whose interest is held other than as a partner in a partnership or as a trustee of a trust,

(

A) a corporate interest holder in respect of the corporation, or

(

B) the spouse, if any, of a corporate interest holder referred to in clause (A);

(iii) if the owner of the residential property is a person whose interest in the residential property is held as a partner in a partnership,

(

A) a partnership interest holder in respect of the interest in the residential property, or

(

B) the spouse, if any, of a partnership interest holder referred to in clause (A);

(iv) if the owner of the residential property is a person whose interest in the residential property is held as a trustee of a trust,

(

A) a beneficial owner in respect of the interest in the residential property, or

(

B) the spouse, if any, of a beneficial owner referred to in clause (A),

but does not include an individual described in paragraph (

a) who occupies a residence that is part of the residential property under a tenancy agreement if, on the date the tenancy agreement comes into effect, the individual is an arm's length tenant in relation to the owner;

"tenancy agreement" means an agreement, in writing, that

(

a) is a tenancy agreement as defined in

section 1 of the Residential Tenancy Act , and

(

b) provides for a tenancy on a monthly or longer basis;

"tenant" means an arm's length tenant or a non-arm's length tenant.

(2) For the purposes of this Division, other than

section 37 [tenancy exemption for widely held owners] , a residence that is part of a residential property is occupied by an arm's length tenant for each month in a calendar year that

(

a) the tenant is entitled, under a tenancy agreement, to occupy the residence, and

(

b) the residence is a place the tenant makes the tenant's home.

(3) For the purposes of this Division, other than

section 37, a residence that is part of a residential property is occupied by a non-arm's length tenant for each month in a calendar year that

(

a) the tenant has permission from one of the owners of the residential property to occupy the residence, and

(

b) the residence is the place in which the tenant resides for a longer period in the month than any other place.

(4) An individual who is an arm's length tenant in relation to an owner of a residential property on the date a tenancy agreement applicable to the individual comes into effect may not be considered an arm's length tenant in relation to the owner for a calendar year for which the individual is the spouse of any of the following:

(

a) if the owner of the residential property is an individual whose interest in the residential property is held other than as a partner in a partnership or as a trustee of a trust, the owner;

(

b) if the owner of the residential property is a corporation whose interest in the residential property is held other than as a partner in a partnership or as a trustee of a trust, a corporate interest holder in respect of the corporation;

(

c) if the owner is a person whose interest in the residential property is held as a partner in a partnership, a partnership interest holder in respect of the interest in the residential property;

(

d) if the owner is a person whose interest in the residential property is held as a trustee of a trust, a beneficial owner respect of the interest in the residential property.

(5) The following persons may not, for a calendar year, be considered a non-arm's length tenant in relation to an owner of a residential property:

(

a) if the owner of the residential property is an individual whose interest in the residential property is held other than as a partner in a partnership or as a trustee of a trust,

(

i) the owner,

(ii) a person who is, for the calendar year, the spouse of the owner, or

(iii) a person who is a child of the owner if the child is a minor on the last day of the calendar year and living with the child's parent or guardian in a residence that is part of the residential property;

(

b) if the owner of the residential property is a corporation whose interest in the residential property is held other than as a partner in a partnership or as a trustee of a trust,

(

i) a corporate interest holder in respect of the corporation,

(ii) a person who is, for the calendar year, the spouse of the corporate interest holder referred to in subparagraph (i), or

(iii) a person who is a child of the corporate interest holder referred to in subparagraph (

i) if the child is a minor on the last day of the calendar year and living with the child's parent or guardian in a residence that is part of the residential property;

(

c) if the owner is a person whose interest in the residential property is held as a partner in a partnership,

(

i) a partnership interest holder in respect of the interest in the residential property,

(ii) a person who is, for the calendar year, the spouse of the partnership interest holder referred to in subparagraph (i), or

(iii) a person who is a child of the partnership interest holder referred to in subparagraph (

i) if the child is a minor on the last day of the calendar year and living with the child's parent or guardian in a residence that is part of the residential property;

(

d) if the owner is a person whose interest in the residential property is held as a trustee of a trust,

(

i) a beneficial owner respect of the interest in the residential property,

(ii) a person who is, for the calendar year, the spouse of the beneficial owner referred to in subparagraph (i), or

(iii) a person who is a child of the beneficial owner referred to in subparagraph (

i) if the child is a minor on the last day of the calendar year and living with the child's parent or guardian in a residence that is part of the residential property.

Tenancy exemption for widely held owners

(1) In this section, "designated stock exchange" has the same meaning as in

section 248 (1) of the federal Act.

(2) An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if

(

a) a residence that is part of the residential property is occupied by an individual under a tenancy agreement for one or more periods each of which is at least one month in duration and that total at least 6 months in the calendar year, and

(

b) the owner is one of the following at the end of the last day of the calendar year:

(

i) a corporation, if the shares of the corporation are listed or traded on a designated stock exchange;

(ii) a person whose interest in the residential property is held as a trustee of a trust if the trust is any of the following:

(

A) a mutual fund trust within the meaning of

section 132 (6) of the federal Act;

(

B) a real estate investment trust as defined in

section 122.1 (1) of the federal Act;

(

C) a SIFT trust as defined in

section 122.1 (1) of the federal Act;

(

D) a trust, if the investments in the trust are listed or traded on a designated stock exchange;

(iii) an owner in a prescribed class of owners.

(3) Despite subsection (2), an owner of a residential property is, for the 2018 calendar year, exempt from tax in respect of the owner's interest in the residential property if

(

a) a residence that is part of the residential property is occupied by an individual under a tenancy agreement for one or more periods each of which is at least one month in duration and that total at least 3 months in the calendar year, and

(

b) the owner is one of the following at the end of the last day of the calendar year:

(

i) a corporation, if the shares of the corporation are listed or traded on a designated stock exchange;

(ii) a person whose interest in the residential property is held as a trustee of a trust if the trust is any of the following:

(

A) a mutual fund trust within the meaning of

section 132 (6) of the federal Act;

(

B) a real estate investment trust as defined in

section 122.1 (1) of the federal Act;

(

C) a SIFT trust as defined in

section 122.1 (1) of the federal Act;

(

D) a trust, if the investments in the trust are listed or traded on a designated stock exchange;

(iii) an owner in a prescribed class of owners.

Tenancy exemption for specified owners

(1) An owner of a residential property is, for the 2019 or a subsequent calendar year, exempt from tax in respect of the owner's interest in the residential property if

(

a) a residence that is part of the residential property is, for one or more periods that total at least 6 months in the calendar year, occupied by an individual who is, in relation to the owner of the residential property,

(

i) an arm's length tenant occupying the residence in accordance with

section 36 (2) [definitions and

interpretation] , or

(ii) a non-arm's length tenant occupying the residence in accordance with

section 36 (3), and

(

b) the owner is, for the calendar year, an owner who is subject to a rate of tax under

section 16 [intermediate tax rate] or 17 [lowest tax rate] .

(2) An owner of a residential property is, for the 2018 calendar year, exempt from tax in respect of the owner's interest in the residential property if

(

a) a residence that is part of the residential property is, for one or more periods that total at least 3 months in the 2018 calendar year, occupied by an individual who is, in relation to the owner of the residential property,

(

i) an arm's length tenant occupying the residence in accordance with

section 36 (2), or

(ii) a non-arm's length tenant occupying the residence in accordance with

section 36 (3), and

(

b) the owner is, for the calendar year, an owner who, but for

section 19 [tax rate applicable for 2018 calendar year] , would be subject to a rate of tax under

section 16 or 17.

Tenancy exemption for other owners

(1) In this section, "BC income" , in relation to an individual for a calendar year, is the individual's BC income for the calendar year as determined under

section 60 (3).

(2) An owner of a residential property is, for the 2019 or a subsequent calendar year, exempt from tax in respect of the owner's interest in the residential property if all of the following apply:

(

a) a residence that is part of the residential property is, for one or more periods that total at least 6 months in the calendar year, occupied by an individual who is, in relation to the owner of the residential property,

(

i) an arm's length tenant occupying the residence in accordance with

section 36 (2) [definitions and

interpretation] , or

(ii) a non-arm's length tenant occupying the residence in accordance with

section 36 (3);

(

b) for the calendar year, the owner

(

i) is an owner who is subject to a rate of tax under

section 15 (1) [highest tax rate] , and

(ii) is not an owner described in

section 37 [tenancy exemption for widely held owners] ;

(

c) each non-arm's length tenant, if any, referred to in paragraph (a) (ii) is an individual

(

i) who is a resident of British Columbia at the end of the last day of the calendar year, and

(ii) whose BC income for the calendar year is equal to or greater than 3 times the annual fair market rent for the entire residential property, determined in accordance with the regulations.

(3) An owner of a residential property is, for the 2018 calendar year, exempt from tax in respect of the owner's interest in the residential property if all of the following apply:

(

a) a residence that is part of the residential property is, for one or more periods that total at least 3 months in the calendar year, occupied by an individual who is, in relation to the owner of the residential property,

(

i) an arm's length tenant occupying the residence in accordance with

section 36 (2), or

(ii) a non-arm's length tenant occupying the residence in accordance with

section 36 (3);

(

b) for the calendar year, the owner

(

i) is an owner who, but for

section 19 [tax rate applicable for 2018 calendar year] , would be subject to a rate of tax under

section 15 (1) [highest tax rate] , and

(ii) is not an owner described in

section 37 [tenancy exemption for widely held owners] ;

(

c) each non-arm's length tenant, if any, referred to in paragraph (a) (ii) is an individual

(

i) who is a resident of British Columbia at the end of the last day of the calendar year, and

(ii) whose BC income for the calendar year is equal to or greater than 3 times the annual fair market rent for the entire residential property, determined in accordance with the regulations.

Division 5 – Exemptions for Residential Property

Under Construction or Renovation

Definitions

40 In this Division:

"building activity" means any of the following activities relating to the construction, placement or substantial renovation, as the case may be, of a residence that is part of a residential property:

(

a) applying for financing;

(

b) applying for a permit or other necessary approval;

(

c) entering into contracts for designing, building or engineering;

(

d) demolishing or removing existing improvements;

(

e) clearing or excavating the site;

(

f) constructing or placing the residence on the residential property or substantially renovating the residence;

(

g) any other activity necessary for the construction, placement or substantial renovation of the residence;

"substantial renovation" means a renovation of an existing residence that is part of a residential property to such an extent that the residence must be vacant.

Exemption for vacant residential property –

construction or renovation

41 A residential property is, for a calendar year, exempt from tax if all of the following apply:

(

a) in the calendar year, building activity is started or continued

(

i) in relation to the construction or placement of a residence on the residential property, or

(ii) in relation to the substantial renovation of an existing residence on the residential property;

(

b) in the calendar year, an owner of the residential property takes reasonable steps to ensure that building activity in relation to the residence progresses without undue delay;

(

c) if there is any undue delay in the progression of building activity in relation to the residence, the delay is caused by circumstances beyond the reasonable control of an owner of the residential property;

(

d) because of the stage of building activity, either

(

i) the residential property does not yet include a residence, or

(ii) there is a period of at least 90 days in the calendar year during which a residence that is part of the residential property cannot be occupied.

Exemption for vacant heritage property – conservation

(1) In this section:

"conservation" has the same meaning as in

section 1 of the Heritage Conservation Act ;

"heritage property" means property that is

(

a) designated under

section 9 of the Heritage Conservation Act ,

(

b) protected heritage property within the meaning of

section 1 of the

Schedule to the Local Government Act , or

(

c) protected heritage property within the meaning of

section 2 [interpretation] of the Vancouver Charter .

(2) A residential property that includes heritage property is, for a calendar year, exempt from tax if, because of an owner's conservation of the heritage property, there is a period of at least 90 days in the calendar year during which a residence that is part of the residential property cannot be occupied.

Exemption for phased developments of residential property

(1) In this section, "phased residential development" means a development of 5 or more residences on 2 or more residential properties if

(

a) the development will be carried out in phases, and

(

b) every owner of the residential properties is the same person or is a related person within the meaning of

section 251 (2) of the federal Act.

(2) Subject to this section, a residential property is, for a calendar year, exempt from tax if all of the following apply:

(

a) the residential property is part of a phased residential development;

(

b) in the calendar year, building activity is started or continued in relation to the construction or placement of a residence on one or more of the residential properties that are part of the phased residential development;

(

c) in the calendar year, an owner of a residential property that is part of the phased residential development takes reasonable steps to ensure that building activity referred to in paragraph (

b) progresses without undue delay;

(

d) if there is any undue delay in the progression of building activity, the delay is caused by circumstances beyond the reasonable control of an owner of a residential property that is part of the phased residential development.

(3) Subsection (2) does not apply to a residential property that is part of a phased residential development if a residence that is part of the residential property can be occupied for a period of at least 180 days in the calendar year.

Exemption for vacant new inventory

(1) In this section, "residential development" means a development of 5 or more residences on one or more residential properties.

(2) An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if all of the following apply:

(

a) the residential property is part of a residential development;

(

b) a residence has been newly constructed or placed on the residential property;

(

c) the residence is not occupied as a residence at the end of the last day of the calendar year and has not been occupied as a residence since it was constructed or placed on the land;

(

d) in the calendar year, the residence is offered to the public for sale;

(

e) the owner of the residential property was a developer of the residential property.

Division 6 – Exemptions for Certain Circumstances

Additional residential property exempt – medical reason

(1) In this section:

"medical reason" , in relation to an individual for a calendar year, means participation in a course of treatment

(

a) that, in the opinion of a medical practitioner, is required for the health of the individual, and

(

b) that can be obtained in a facility that is in reasonably close proximity to a residence in which the individual periodically resides;

"qualifying individual" , in relation to an owner, means any of the following:

(

a) if the owner of the residential property is an individual whose interest in the residential property is held other than as a partner in a partnership or as a trustee of a trust, the owner;

(

b) if the owner of the residential property is a corporation whose interest in the residential property is held other than as a partner in a partnership or as a trustee of a trust, a corporate interest holder in respect of the corporation;

(

c) if the owner of the residential property is a person whose interest in the residential property is held as a partner in a partnership, a partnership interest holder in respect of the interest in the residential property;

(

d) if the owner of the residential property is a person whose interest in the residential property is held as a trustee of a trust, a beneficial owner in respect of the interest in the residential property.

(2) An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if, in the calendar year, an individual who is a qualifying individual in relation to the owner for the calendar year or who is the spouse or child, if any, of a qualifying individual, periodically resides in a residence that is part of the residential property for a medical reason related to the individual.

(3) In order to claim an exemption under this section, the owner referred to in subsection (2), must file, with a declaration, a document that is completed by a medical practitioner.

(4) The document that is completed by the medical practitioner must be

(

a) filed in the manner required by the administrator, and

(

b) in the form and contain the information required by the administrator.

Exemption on death

(1) Subject to subsection (2), on the death of an individual who is an owner of a residential property, any owner of the residential property is, for the calendar year in which the death occurs and the immediately following calendar year, exempt from tax in respect of that owner's interest in the residential property.

(2) Subsection (1) only applies to an owner of the residential property other than the individual who died if

(

a) the owner was an owner of the residential property on the date the death occurred, or

(

b) the owner is the personal representative of the deceased.

Exemption on testamentary trust

(1) An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if both of the following apply:

(

a) the owner is a person whose interest is held as a trustee of a testamentary trust for the benefit of a person who is a minor at any time in the calendar year;

(

b) the testamentary trust was created by a parent or guardian of the minor.

(2) The owner referred to in subsection (1) is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if, in that calendar year, the minor referred to in subsection (1) (

a) dies.

Exemption in year of acquisition – as a consequence of death

(1) Subject to subsection (2), an owner of a residential property is exempt from tax in respect of the owner's interest in the residential property for the calendar year in which the owner acquires that interest if the owner acquires that interest as a consequence of the distribution of a person's estate as defined in

section 1 (1) of the Wills, Estates and Succession Act .

(2) Subsection (1) does not apply for a calendar year to an owner of a residential property if the owner or any other owner of the residential property was exempt under this

section in respect of the residential property in a preceding calendar year as a consequence of a distribution from the same estate.

Exemption in year of acquisition – other

(1) An owner who is a registered owner of the estate in fee simple of a residential property is exempt from tax in respect of the owner's interest in the residential property for the calendar year in which the owner acquires that interest if, in respect of the transaction in which the owner acquires that interest,

(

a) the owner paid tax under the Property Transfer Tax Act , or

(

b) the owner did not pay tax under the Property Transfer Tax Act only because the owner qualified for an exemption under any of the following provisions of that Act:

(

i) section 5 [first time home buyers' exemption] ;

(ii)

section 12.02 [new housing exemption] ;

(iii)

section 14 (3) (k) [reversion, escheat or forfeit of land] ;

(iv)

section 14 (3) (o) [transfer of land by trustee in bankruptcy] ;

(v)

section 14 (3) (p) [transfer of principal residence by trustee in bankruptcy] ;

(vi)

section 14 (4) (p.3) [transfer of land by Public Guardian and Trustee] ;

(vii)

section 14 (4) (r) [transfer to a veteran or veteran's spouse] .

(2) An owner who is a registered holder of the last registered agreement for sale of a residential property is exempt from tax in respect of the owner's interest in the residential property for the calendar year in which the owner acquires that interest if, in respect of the transaction in which the owner acquires that interest,

(

a) the owner paid tax under the Property Transfer Tax Act , or

(

b) the owner did not pay tax under the Property Transfer Tax Act only because the owner qualified for an exemption under any of the following provisions of that Act:

(

i) section 5 [first time home buyers' exemption] ;

(ii)

section 12.02 [new housing exemption] ;

(iii)

section 14 (3) (k) [reversion, escheat or forfeit of land] ;

(iv)

section 14 (3) (l) [transfer of land in respect of which tax has been paid] ;

(v)

section 14 (3) (o) [transfer of land by trustee in bankruptcy] ;

(vi)

section 14 (3) (p) [transfer of principal residence by trustee in bankruptcy] ;

(vii)

section 14 (4) (p.3) [transfer of land by Public Guardian and Trustee] ;

(viii)

section 14 (4) (r) [transfer to a veteran or veteran's spouse] .

(3) An owner who is a registered occupier of a residential property is exempt from tax in respect of the owner's interest in the residential property for the calendar year in which the owner acquires that interest if the owner was not, in the immediately preceding calendar year, a registered occupier in relation to that residential property.

Exemption on breakdown of marriage

or common-law partnership

(1) In this section:

"common-law partner" , in relation to a person, means an individual who has lived with the person in a marriage-like relationship for a continuous period of at least 2 years;

"common-law partnership" means the relationship between 2 persons who are the common-law partners of one another;

"eligible individual" , in relation to an owner of a residential property, means any of the following:

(

a) an individual who is a corporate interest holder in respect of a corporation, if the corporation is an owner of the residential property that holds an interest in the residential property other than as a partner in a partnership or as a trustee of a trust;

(

b) an individual who is a partnership interest holder in respect of an interest in the residential property, if

(

i) the owner of the residential property who holds the interest in the residential property holds the interest as a partner in a partnership, and

(ii) none of the partners in the partnership is a corporation in respect of which there are no corporate interest holders or a partnership;

(

c) an individual who is a beneficial owner in respect of an interest in the residential property, if the owner of the residential property who holds the interest holds the interest as a trustee of a trust;

"spouse" includes a common-law partner.

(2) An owner of a residential property is, for a calendar year, exempt from tax in respect of the owner's interest in the residential property if all of the following apply:

(

a) the owner is, for the calendar year,

(

i) an individual who holds the interest in the residential property other than as a partner in a partnership or as a trustee of a trust, or

(ii) an owner referred to in paragraph (a), (

b) or (

c) of the definition of "eligible individual" and in respect of whom all of the requirements set out in the applicable paragraph are met;

(

b) because of a breakdown of the marriage or common-law partnership of an individual referred to in paragraph (a) (

i) or an individual who is an eligible individual in relation to the owner for the calendar year,

(

i) the individual and the person who was the individual's spouse at the time of the breakdown begin living separate and apart in the calendar year and live separate and apart for at least 90 days in the calendar year, or

(ii) all of the following apply in respect of the individual and the person who was the individual's spouse at the time of the breakdown:

(

A) the spouses began living separate and apart in the immediately preceding calendar year;

(

B) a final agreement or final court order respecting property division was not made in that immediately preceding calendar year;

(

C) the spouses continue to live separate and apart throughout the calendar year;

(

c) in the case of an eligible individual referred to in paragraph (b), the eligible individual or the person who was the eligible individual's spouse at the time of the breakdown is, or both of them are,

(

i) if the owner is an owner referred to in paragraph (

a) of the definition of "eligible individual", the only corporate interest holder or holders, as applicable, in respect of the corporation that is the owner,

(ii) if the owner is an owner referred to in paragraph (

b) of the definition of "eligible individual", the only partnership interest holder or holders, as applicable, in respect of the interest in the residential property held by the owner, or

(iii) if the owner is an owner referred to in paragraph (

c) of the definition of "eligible individual", the only beneficial owner or owners, as applicable, in respect of the interest in the residential property held by the owner;

(

d) at the end of the last day of the calendar year, the spouses referred to in paragraph (b) (

i) or (ii), as applicable, have not reconciled;

(

e) the residential property is family property, within the meaning of

Part 5 [Property Division] of the Family Law Act , of the spouses referred to in paragraph (b) (

i) or (ii), as applicable, or a right or interest held by the spouses referred to in paragraph (b) (

i) or (ii), as applicable, in the residential property is family property of those spouses within the meaning of

Part 5 of the Family Law Act .

(3) The owner of a residential property referred to in subsection (2) is, for the calendar year immediately following the calendar year referred to in that subsection, exempt from tax in respect of the owner's interest in the residential property if all of the following apply:

(

a) the spouses referred to in subsection (2) (b) (

i) or (ii), as applicable, continue to live separate and apart throughout the calendar year;

(

b) in the case of spouses referred to in subsection (2) (b) (ii), the spouses began living separate and apart fewer than 90 days before the end of the calendar year immediately preceding the calendar year referred to in subsection (2);

(

c) at the end of the last day of the calendar year, the spouses referred to in subsection (2) (b) (

i) or (ii), as applicable, have not reconciled;

(

d) a final agreement or final court order respecting property division was not made in the calendar year referred to in subsection (2).

Exemption for restricted rentals –

2018 and 2019 calendar years

51 An owner of a residential property is, for the 2018 and 2019 calendar years, exempt from tax in respect of the owner's interest in the residential property if, on or before the date this Act receives First Reading in the Legislative Assembly,

(

a) the owner acquired the interest in the residential property, and

(

b) a covenant under

section 219 of the Land Title Act or a bylaw of a strata corporation prohibited the occupation of a residence that is part of the residential property by an arm's length tenant, as defined in

section 36 (1) [definitions and

interpretation] of this Act, in a manner that would entitle the owner to an exemption in respect of the residential property under any of the following:

(

i) section 37 [tenancy exemption for widely held owners] ;

(ii)

section 38 [tenancy exemption for specified owners] ;

(iii)

section 39 [tenancy exemption for other owners] .

Part 4 – Tax Credits

Definitions and

interpretation

(1) In this Part:

"amalgamation" means an amalgamation within the meaning of

section 53;

"BC income" means an individual's or a corporation's BC income for a calendar year as determined under

section 60;

"eligible taxpayer" means,

(

a) for the 2019 or a subsequent calendar year, an owner of a residential property who is subject to a rate of tax under

section 15 [highest tax rate] or 16 [intermediate tax rate] for the calendar year, or

(

b) for the 2018 calendar year, an owner of a residential property who, but for

section 19 [tax rate applicable for 2018 calendar year] , would be subject to a rate of tax under

section 15 or 16 for the 2018 calendar year,

but does not include an owner who holds an interest in the residential property as a partner in a partnership;

"new corporation" means the corporation that results from the amalgamation of 2 or more corporations;

"predecessor corporation" means a corporation that amalgamates with one or more corporations.

(2) For the purposes of this Part and without limiting

section 7,

(

a) a person who is a trustee of a trust is

(

i) a separate person from the person in the capacity as a trustee, and

(ii) a separate person in respect of each trust for which the person is a trustee,

(

b) an individual in the individual's capacity as a partner in a partnership or as a trustee of a trust may not

(

i) transfer an amount to the individual's spouse under

section 58 [transfer of BC income balance to spouse] , or

(ii) receive a transfer of an amount under

section 58,

(

c) the calculation of a person's BC income in the capacity as a trustee of a trust does not affect the calculation of the person's own BC income, and

(

d) if a trust has more than one trustee, only one trustee of the trust may determine under

section 60 (5) the trustee's BC income for a calendar year as a trustee of the trust.

Amalgamations

53 For the purposes of this Part, an amalgamation of 2 or more corporations occurs if all of the following requirements are met:

(

a) the amalgamation was effected under

(

i) Division 3 of

Part 9 of the Business Corporations Act or similar provisions of another enactment of British Columbia,

(ii) sections 181 to 186 of the

Canada Business Corporations Act or similar provisions of another enactment of Canada, or

(iii) similar provisions of an enactment of another jurisdiction;

(

b) all of the predecessor corporations are continued in the new corporation as a result of the amalgamation;

(

c) the property, rights and interests of each predecessor corporation continue to be the property, rights and interests of the new corporation;

(

d) the new corporation continues to be liable for the obligations of each predecessor corporation.

Tax credit for resident of British Columbia

(1) Subject to subsection (2), this

section applies to an owner in respect of a residential property for a calendar year if

(

a) the owner is an individual who is a resident of British Columbia at the end of the last day of the calendar year,

(

b) the owner must pay tax for the calendar year in respect of the owner's interest in the residential property,

(

c) the owner,

(

i) for the 2019 or a subsequent calendar year, is subject to a rate of tax under

section 17 [lowest tax rate] for the calendar year, or

(ii) for the 2018 calendar year, would be subject to a rate of tax under

section 17 but for

section 19 [tax rate applicable for 2018 calendar year] , and

(

d) the owner is not a minor on the last day of the calendar year.

(2) This

section does not apply to an owner in respect of the owner's interest in the residential property held as a partner in a partnership or as a trustee of a trust.

(3) Subject to subsections (4) and (5), the tax otherwise payable for a calendar year in respect of a residential property by an owner to whom this

section applies is reduced by the amount not exceeding the lesser of

(a) $2 000, and

(

b) the amount determined by multiplying $2 000 by the owner's interest in the residential property for the calendar year, expressed as a percentage.

(4) The total of all reductions made under subsection (3) to an owner's tax payable for a calendar year in respect of all residential properties in which the owner holds an interest may not exceed $2 000.

(5) If an owner must pay tax for a calendar year in respect of the owner's interest in more than one residential property, the administrator must determine for which of those residential properties the owner's tax payable is reduced under subsection (3) and the amount of that reduction.

(6) If the tax otherwise payable for a calendar year is reduced under this

section after the date the tax was payable under

section 78 [payment of tax] , the reduction is deemed to have occurred on that date.

Tax credit for eligible taxpayer

(1) If an eligible taxpayer must pay tax for a calendar year in respect of an eligible taxpayer's interest in a residential property, the eligible taxpayer may deduct from the eligible taxpayer's tax otherwise payable for the calendar year in respect of the residential property an amount not exceeding the lesser of

(

a) the amount equal to the eligible taxpayer's tax credit balance for the calendar year determined under

section 56, less any amount of that balance claimed for the calendar year by the eligible taxpayer in respect of another residential property, and

(

b) the eligible taxpayer's maximum tax credit for the calendar year in respect of the residential property, determined under subsection (2) of this section.

(2) An eligible taxpayer's maximum tax credit for a calendar year in respect of a residential property is

(

a) the amount referred to in subsection (1) that is the eligible taxpayer's tax otherwise payable for the calendar year in respect of the residential property if

(

i) the eligible taxpayer is an individual whose interest in the residential property is held other than as a trustee of a trust and who would have been exempt under

Part 3 from tax for the calendar year in respect of the residential property had the eligible taxpayer been an owner referred to in

section 17 (2) (a),

(ii) the eligible taxpayer is a corporation whose interest in the residential property is held other than as a trustee of a trust and that eligible taxpayer would have been exempt under

Part 3 from tax for the calendar year in respect of the residential property had the eligible taxpayer been an owner referred to in

section 17 (2) (b), or

(iii) the eligible taxpayer is a person whose interest in the residential property is held as a trustee of a trust and who would have been exempt under

Part 3 from tax for the calendar year in respect of the residential property had the eligible taxpayer been an owner referred to in

section 17 (4), or

(

b) the amount determined by the following formula, in any other case:

amount = tax payable x

(applicable tax rate – lowest tax rate)

applicable tax rate

where

tax payable

the eligible taxpayer's tax otherwise payable for the calendar year in respect of the residential property;

applicable tax rate

the tax rate applicable under

section 15 or 16 to the eligible taxpayer for the calendar year;

lowest tax rate

the tax rate under

section 17 for the calendar year.

(2.1) If an eligible taxpayer is, for a calendar year, an owner of a residential property who is subject to a rate of tax under

section 16 [lowest tax rate – specified Canadian citizens and specified permanent residents of Canada] ,

(a) subsection (2) (

b) of this

section does not apply for the purposes of determining the eligible taxpayer's maximum tax credit in respect of the residential property, and

(

b) the eligible taxpayer's maximum tax credit in respect of the residential property is nil if subsection (2) (

a) does not apply to the eligible taxpayer.

(3) For the 2018 calendar year,

(a) subsection (2) (

b) does not apply for the purposes of determining an eligible taxpayer's maximum tax credit in respect of a residential property, and

(

b) an eligible taxpayer's maximum tax credit in respect of a residential property is nil if subsection (2) (

a) does not apply to the eligible taxpayer.

Tax credit balance

56 For the purposes of

section 55, an eligible taxpayer's tax credit balance for a calendar year is the amount determined in accordance with the following formula:

tax credit balance = (BC income balance – spousal transfer) x applicable rate x 10

where

BC income balance

the eligible taxpayer's BC income balance for the calendar year determined under

section 57;

spousal transfer

any amount of the eligible taxpayer's BC income balance for the calendar year transferred under

section 58 [transfer of BC income balance to spouse] for the calendar year by the eligible taxpayer;

applicable rate

the tax rate applicable under

section 15, 16 or 19 to the eligible taxpayer for the calendar year.

BC income balance

(1) For the purposes of

section 56 and subject to this section, an individual's or a corporation's BC income balance for a calendar year is an amount equal to the total of the following:

(

a) in the case of an individual, an amount transferred for the calendar year to the individual under

section 58 [transfer of BC income balance to spouse] ;

(

b) the individual's or corporation's BC income for the second preceding calendar year, less any of the following amounts:

(

i) in the case of an individual, any deductible amount determined under

section 58 (6) for the second preceding calendar year and the preceding calendar year;

(ii) any deductible amount determined under

section 59 (3) for the second preceding calendar year and the preceding calendar year;

(

c) the individual's or corporation's BC income for the preceding calendar year, less any of the following amounts:

(

i) in the case of an individual, the deductible amount determined under

section 58 (6) for the preceding calendar year;

(ii) the deductible amount determined under

section 59 (3) for the preceding calendar year;

(

d) the individual's or corporation's BC income for the calendar year.

(2) A deductible amount determined under

section 58 (6) or 59 (3) and to be deducted under subsection (1) (

b) or (

c) of this

section is to be deducted in accordance with the following rules:

(

a) in the case of an individual, a deduction under subsection (1) (b) (

i) or (c) (

i) is to be made before a deduction under subsection (1) (b) (ii) or (c) (ii) is made;

(

b) a deduction is to be made in relation to the earliest calendar year for which a deduction may be made, with any remaining part of the deductible amount to be deducted in relation to the following calendar year if applicable;

(

c) the amount of a deduction made under subsection (1) (

b) or (

c) may not exceed the amount otherwise determined under that subsection before the deduction is made.

(3) If a corporation is at any time subject to a loss restriction event, within the meaning of

section 251.2 (2) of the federal Act,

(

a) the corporation's BC income balance for a calendar year ending before that time may not include income earned after that time, and

(

b) the corporation's BC income balance for a calendar year ending after that time may not include income earned before that time.

(4) If a trust is at any time subject to a loss restriction event, within the meaning of

section 251.2 (2) of the federal Act,

(

a) the BC income balance for a calendar year ending before that time of a person who is a trustee of the trust may not include income earned after that time, and

(

b) the BC income balance for a calendar year ending after that time of a person who is a trustee of the trust may not include income earned before that time.

(5) Subject to subsection (3), if 2 or more corporations amalgamate, the new corporation's BC income balance for a calendar year is determined under subsection (1) by including all amounts each of which is a predecessor corporation's BC income for an applicable calendar year, to the extent the predecessor corporation's BC income is not otherwise included in the new corporation's BC income for a calendar year, less any amounts under subsection (1) (b) (ii) and (c) (ii) to be deducted from the predecessor corporation's BC income for the applicable calendar year.

(6) Subject to subsection (4), if a new trustee of a trust is appointed to hold an interest in a residential property, the new trustee's BC income balance for a calendar year is determined under subsection (1) as if all amounts relevant to the calculation of the BC income balance of a former or another trustee of the trust were amounts determined for the new trustee.

(7) An individual's or a corporation's BC income for a calendar year before 2017 may not be included in determining the individual's or corporation's BC income balance for a calendar year.

Transfer of BC income balance to spouse

(1) Subject to this section, an individual who has a spouse at the end of the last day of a calendar year may transfer an amount from the individual's BC income balance for the calendar year to the individual's spouse if that spouse is an eligible taxpayer for the calendar year in respect of a residential property.

(2) The amount that an individual may transfer under this

section for a calendar year may not exceed the individual's BC income balance for the calendar year determined under

section 57.

(3) If an individual has transferred under this

section an amount for a calendar year to a spouse and, but for this subsection, the amount determined for the individual's spouse in accordance with the formula in

section 59 (1) is a negative amount, despite this

section and the transfer document filed under subsection (7), the individual is deemed to have transferred under this

section an amount equal to the amount necessary to have the amount determined for the individual's spouse in accordance with the formula in

section 59 (1) equal zero.

(4) An individual may not transfer an amount under this

section for a calendar year for which the individual receives an amount transferred under this section.

(5) For the purposes of subsection (6), an individual's deductible amount for a calendar year is the positive amount, if any, equal to the amount transferred under subsection (1) for the calendar year by the individual less the amount, if any, determined for that individual under

section 57 (1) (

b) for the second preceding calendar year when determining that individual's BC income balance for that calendar year.

(6) If an individual has a deductible amount under this

section for a calendar year, for the purposes of determining the individual's BC income balance for the following 2 calendar years, that individual's deductible amount is to be deducted under

section 57 (1) (b) (

i) and (c) (i), as applicable.

(7) In order to give effect to a transfer of an amount for the purposes of this section, the individual receiving the transfer must file, with the individual's tax credit application filed under

section 61,

(

a) a transfer document in the manner required by the administrator, and

(

b) any other information and records required by the administrator to be filed with the transfer document.

(8) A transfer document must be

(

a) completed by the eligible taxpayer's spouse, and

(

b) in the form and contain the information required by the administrator.

Deductions from BC income balance

(1) If an individual or a corporation claims under

section 55 [tax credit for eligible taxpayer] a tax credit in respect of tax otherwise payable for a particular calendar year, for the purposes of determining the individual's or corporation's BC income balance for the following 2 calendar years, the amo