Anshu Arora LLM, MSc, PMP

Cell 604-828-7331 | yourbcagent@gmail.com

Remind your sellers to ask their financial advisers about the tax deductions they’re eligible for in a home sale. One of the big ones they may qualify for: selling costs.


As long as the costs are directly tied to the sale of the home, they qualify for tax breaks. Also, sellers who have lived in their home as their principal residence for at least two out of the five years prior to selling it can earn tax advantages. “You can deduct any costs associated with selling the home—including legal fees, advertising costs, and real estate agent commissions,”


But tax experts warn that these costs can’t be deducted like mortgage interest. They are subtracted from the sales price of the home. That turns into a capital gains tax. Other potential deductions for sellers are home improvement and repair costs. Sellers who made renovations to make their home more marketable may be able to deduct those costs from their taxes. Renovation projects could include painting the house or repairing the roof or water heater, for example. “If you needed to make home improvements in order to sell your home, you can deduct those expenses as selling costs"


For these and more deductions, contact your account or I can refer you to a great one!

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Which builders should apply

The Homeowner Protection Act defines a residential builder as a person who engages in, arranges for or manages, all, or substantially all, of the construction of a new home or agrees to do any of those things. This definition includes developers and general contractors.


A residential builder must obtain a licence from BC Housing before starting construction on a new project. That licence must be maintained until such time that all new homes enrolled in home warranty insurance have been completed or, in the case of a developer, sold. Even in areas where building permits aren’t required, you must be a licensed residential builder to carry out the work and arrange for home warranty insurance before starting construction.


Part 1 of the Building Envelope Renovation Regulation states that building envelope renovators must not engage in, arrange for or manage all, or substantially all, of a building envelope renovation unless they are licensed as a building envelope renovator. They must also arrange for warranty on the project.


Some building envelope renovation projects are exempt from needing a licensed building envelope renovator. Consult our Building Envelope Renovation Regulations page to learn more. General contractors who are building for a developer under Part 3 of the BC Building Code are exempt from licensing requirements. That’s as long as the developer is licensed and has enrolled the project in home warranty insurance.


Pick your licence type

The first step in the application process is to know your licence type. You have three licence options to choose from: general contractor, developer or building envelope renovator — or a combination of the three. 

Select the licence types(s) that fit your current and future business activities as a residential builder. To learn more about each licence type, consult our regulatory bulletin, Choose Your Licence Type


If you apply for a new residential builder licence as a general contractor, and you don’t have a current residential builder licence in good standing, you must meet the qualification requirements. These requirements are mandated by the Homeowner Protection Act and Regulations. Consult our Qualification Requirements page to learn more. If you apply for a licence as a developer only, you don’t have to meet the qualification requirements. However, you must complete a declaration that states:

  • You will not take part in constructing or developing Part 9 homes during the term of your licence, or
  • You will hire licensed general contractors to construct any Part 9 homes.

If you fail to comply with this declaration, we may suspend or cancel your residential builder licence. Therefore, it’s important you choose the right licence type for the business you are conducting.

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Deductibles to cover claims are also rising. In some cases, we’ve heard of deductibles increasing as much as $500,000. Remember that insurance doesn’t cover claims under the deductible amount. So, for example, if a plumbing incident were to cause $75,000 in water damage to a strata owner’s unit, and the strata’s deductible was $100,000, then insurance wouldn’t cover the claim. In such a scenario, the owner could have to pay for the damages out of pocket, depending on the strata’s bylaws.

Why are insurance rates increasing?

Strata building insurance premiums are increasing for a variety of reasons, according to the insurance industry. These include an increase in the number of claims, in the cost of repairs and rebuilding, and in the growing number of strata developments. Many strata buildings date back to the 1970s and ’80s and strata owners may be reluctant to undertake major system upgrades until problems occur.

What you can do about strata insurance

Given these rising rates, strata owners should ask their strata corporation or manager for a copy of the corporation’s certificate of insurance. This document details current deductible amounts. Strata owners should show the certificate of insurance to their insurance provider and understand what their liability would be in the strata, if the insurance doesn’t cover the deductible. Strata property owners should also:

  • have a unit owner’s insurance policy;
  • have a policy that covers the higher deductible (insurance deductible insurance) to cover a loss in their unit; and
  • understand the risk of not having enough coverage.

The Strata Property Act Part 9 requires strata buildings to be insured for full replacement value of all common property, common assets, and fixtures.





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The speculation and vacancy tax is an annual tax based on how owners use residential properties in major urban areas in B.C. All residential property owners in the designated taxable regions must complete an annual declaration for the speculation and vacancy tax.


The speculation and vacancy tax is due on the first business day in July (July 2 in 2020). However, you can pay the tax anytime after you receive a Notice of Assessment in the mail, which will show the amount of speculation and vacancy tax you owe. After you declare, a Notice of Assessment will be generated and mailed to you if you owe the tax.


For properties owned on December 31, 2018, the tax rate is the same for everyone: 0.5% of the assessed value of your residential property on July 1, 2018, as determined by BC Assessment. B.C. owners are eligible for a tax credit of up to $2,000 on secondary properties to offset their tax payable.

For 2019 and onwards, the speculation and vacancy tax rate varies, depending on your residency and where you pay income tax:

The speculation and vacancy tax applies based on ownership as of December 31 each year.

If a residential property has multiple owners, any owed tax is divided among each owner based on their ownership share. For example, if you and your spouse are equal owners of a residential property in a taxable region, and no exemption applies, you’ll each owe tax on 50% of the home’s assessed value.

The tax rate for a corporation, trustee or business partner will be the highest rate applicable to any of the corporate interest holders, beneficial owners or business partners if they held the residential property individually.


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BC Assessment notices have arrived in the mail, giving some homeowners a big smile and a bit more spring in their step (increased property taxes aside), while others wilt and lament at a modest gain or decrease in assessed value.


But hold on a sec. Neither this assessment document, nor either parties’ emotions, are tied to a current true market value. In fact, provincial property assessments can be significantly too high or too low. Values are determined in July of the previous year, and properties are rarely visited in person by provincial appraisers.


For this reason, provincial property assessments should never be solely relied upon as any sort of relevant indicator of true market value for the purposes of purchase, sale or financing.


A quick survey of recent sales and their relation to assessed values will often demonstrate no clear relationship between sale price and assessed value. It’s often all over the map.


BC Assessments were done in July 2019 and market significantly went up in October, November and December 2019!!

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