Blog
1% Tax on Empty Homes
by Karen Arscott
Vancouver City Council has approved a program to introduce a yearly tax on properties that are not the registered owner’s principal residence, and which are left empty for at least 6 months of the year. The tax will be charged at 1% of the property’s assessed value.
Reasons for Implementing the Tax
The tax is to encourage registered owners to rent out their properties that are not their principal residence, rather than leave them empty. This is an attempt to boost the rental market, whilst raising money for new housing from the tax received.
When and How the Tax will be Implemented
In 2018, home owners will be required to declare the status of their properties in 2017, and to pay the tax if applicable. This will continue every year as each year registered owners will be required to prove that their properties are their principal residence. Such declarations will be vigorously audited on properties in high-likelihood areas, following reports from residents, and random checks. If owners fail to declare the status of their property, it will be deemed vacant and subject to the tax. There will be high penalties for false declarations or non-compliance.
Exemptions to Paying the Tax
The following are some exemptions that have been identified, but there may be other situations that are added as different scenarios are presented to the City:
- If the registered owner claims a principal residence elsewhere, but uses the property for work within Vancouver for at least six months of the year.
- If the registered owner, occupying family member, or tenant is undergoing medical or supportive care.
- If ownership of the property changes during the year.
- If the owner is deceased and a grant of probate or administration is pending.
- If the property is undergoing major renovations, or is under construction or redevelopment, and permits have been issued.
- If the property is subject to strata rental restrictions as of November 16, 2016.
- If the property is under a court order prohibiting occupancy.
- If the property’s use is limited to vehicle parking, or the shape, size or other aspect of the property precludes the ability to construct a residential building.