In case you missed it, effective January 1, 2026, speculation and vacancy tax rates have increased, with the largest impact falling on foreign owners and untaxed worldwide earners. While the structure of the tax remains the same, the rates have increased.
As of January 1, 2026, speculation and vacancy tax rates have increased as follows:
- Foreign owners and untaxed worldwide earners: the rate has increased from 2% to 3% of the property’s assessed value;
- Canadian citizens or permanent residents of Canada (who are not untaxed worldwide earners): the rate has increased from 0.5% to 1% of the property’s assessed value.
These new rates apply to tax payable based on how residential property is used during the 2026 calendar year and onward. They do not apply retroactively and will not affect taxes declared for 2025 or earlier years.
The speculation and vacancy tax applies based on ownership as of December 31 of each year (for more information on this piece, see our blog: Speculation and Vacancy Tax – Year End Considerations | Touchstone Law Group LLP – Kelowna Lawyers | Barristers & Solicitors). Each tax year aligns with the calendar year, and tax owing for a particular year is payable the following July. For example, tax based on a property’s use in 2026 will be due in July 2027.
As the higher rates take effect in 2026, residential property owners should take the time to review their ownership structure, residency status, and use of their property to understand how these changes may affect them. With the increased cost of non-compliance, early planning and proper filing are more important than ever to avoid unexpected tax exposure.
This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250)448-2637 or any of our lawyers practicing in the area of residential real estate.