Land under development exemptions for the speculation and vacancy tax

Owners of property that is under construction are exempt from speculation and vacancy tax if reasonable steps are taken without undue delay to develop or renovate the property.

These exemptions also cover larger–scale phased developments that occur over time, vacant new inventory, and heritage properties where conservation work is taking place.

To be eligible for an exemption, the owner must be carrying out eligible building activity.

"Building activity" is defined as the following types of activities:

• Applying for financing
• Applying for a permit or other necessary approval
• Entering into contracts for designing, building or engineering
• Demolishing or removing existing improvements
• Clearing or excavating the site
• Constructing or placing the residence on the property or substantially renovating the residence (“substantial renovation” is when no one can live there because of renovations)
• Any other activity necessary for the construction, placement or substantial renovation of the residence

The following exemptions are available to eligible owners who own land that’s under development within the taxable regions:

1. Construction or renovation
2. Heritage conservation
3. Phased developments
4. Vacant new inventory

1. Construction or renovation

Owners are exempt if a residence on the property cannot be occupied for a period of 90 days in the calendar year due to construction or renovation OR if there is not yet a residence on the property due to the stage of building activity, as long as reasonable steps are being taken without undue delay to develop or renovate the property.

Be sure to keep accurate records. If you're audited you may be required to provide supporting documentation of building activity for each calendar year in which this exemption was claimed. This might include documentation of the:

• Progress you've made
• Time put in
• Costs incurred

2. Heritage conservation

An owner of a heritage property is exempt if a residence that's part of the heritage property was unable to be occupied for a period of at least 90 days in the calendar year because of activity undertaken to protect, preserve or enhance the heritage property.

3. Phased developments

Owners are exempt where specific multi-unit residential developments are being built in phases on two or more residential properties, if reasonable steps are being taken without undue delay to develop one of the residential properties. The exemption does not apply to a property if one of the residences on the property could have been occupied as a home for a period of 180 days in the calendar year.

4. Vacant new inventory

There’s no tax on a vacant, newly constructed residence that is part of a residential development, as long as that residence:

• Is owned by the developer of the property
• Has been offered for sale to the public this calendar year
• Has not yet been occupied as a home