You are in the right place to discover if you are a satellite family for British Columbia real estate property ownership and applicable tax reasons.
As a member of a satellite family, you may also qualify for tax exemptions that may be available to you when filling out your annual declaration.
This post was follows an introduction to the Speculation Tax and Vacancy Tax which impacts both Canadian and foreign real estate owners in BC.
Let’s get started.
A satellite family is defined as afamily where less than 50% of the combined household income is taxed in Canada on Canadian income tax returns of course.
As an example, you may have a resident spouse and perhaps a non-resident spouse and the non-resident individual is the main income earner in the family. And, the non-resident spouse’s income is more than 50% of the combined family household income. That is a situation where the resident spouse is a member of a satellite family.
An important point here is that you can still be a member of a satellite family even though you are a Canadian citizen or a BC resident. So, look closely at the definition of a satellite family and see if you fall into that definition.
There are tax exemptions available to you and it’s important to know that you claim your exemption at the same time that you’re filing your annual declaration. Also, keep in mind that exemptions must be claimed in respect of each owner.
Each owner needs to file their own annual declaration and claim their own exemption. As far as exemptions are concerned, they kind of fall into three main categories:
- The first one being a property occupied by owner
- The second one is a property occupied by a tenant
- The third is properties that are currently under development
Consulting a licensed expert is always a wise choice if your situation begins to feel complex. Why?
Because the list of exemptions you may be entitled to claim is also detailed. It’s to your advantage to explore all the avenues available to you whether you are a satellite family member resident or non-resident. If you’d like to research the available exemptions, you can check out the full list at www.gov.bc.ca – and search: Speculation Tax.
In summary, the BC government’s stated definition of a “satellite family is an individual or spousal unit where the majority of their total worldwide income for the year is not reported on a Canadian tax return. If a residential property has multiple owners, tax is divided among each owner based on their ownership share.”
Make sure that you are well aware of the other exemptions in case you fall into any of those. Feel free to email or phone me and we can have a conversation as to where your place is in this set of tax responsibilities as well as benefits.
Read more about the top three categories mentioned in this post here. (Humphrey blog 5C then There are many more exemptions. To see if you qualify, check out this video or read about them in more detail in this post.
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