In response to a rental vacancy rate of less than one per cent and a significant number of empty homes, the City of Vancouver brought in an Empty Homes Tax effective January 1, 2017.
“Vancouver is in a rental housing crisis. The city won’t sit on the sidelines while over 20,000 empty and under-occupied properties hold back homes for renters struggling to find an affordable and secure place to live,” says Mayor Gregor Robertson.
The city estimates the tax will raise $2.2 million per year when fully implemented. Initial costs to implement the tax are estimated at $4.7 million over three years. Ongoing operating expenses are expected to total $1.5 million annually beginning in 2018.
How much is the tax?
The tax rate is 1 per cent of assessed value in 2017. Owners of non-principal residences unoccupied for six months or more each year will pay this tax.
Who won’t pay the tax?
The tax will not apply to:
- Vancouver homeowners, including snowbirds;
- owners of principal residences;
- a house with a basement suite or a laneway house if one of the units is occupied; and
- owners of properties rented long-term (with a tenancy agreement), or for at least 30 days in a row for a minimum of six months or a total of 180 days a year. For example, a homeowner renting a property for six 30-day terms is exempt from the tax, even if those six 30-day terms are not consecutive.
What is a principal residence?
The city defines principal residence as:
“The usual place where an individual lives, makes his or her home and conducts his or her daily affairs, including, paying bills and receiving mail, and is the residential address used on documentation related to billing, identification, taxation and insurance purposes, including income tax returns, medical services plan documents, driver’s licences, personal identification, vehicle registration and utility bills.”
Property status declaration: owners will receive notification to complete a property status declaration with their advance property tax notice issued in December each year.
- February 2, 2018, is the deadline for all homeowners to complete their first property status declaration stating whether their home is a principal residence or empty.
- The declaration will have four categories:
- Principal residence.
- Eligible for exemption.
- Vacant property.
- A property owner who doesn’t complete their declaration will have their home deemed empty and will pay the one per cent tax. All declarations will be audited.
- April 16, 2018: Empty Homes Tax payment due.
- December 31, 2018: unpaid tax added to the property tax bill.
Does the Empty Homes Tax apply to you?