FAQs: The Empty Homes Tax

by Jasmine Fernando and Geoffrey Lim

The Empty Homes Tax (EHT) came into effect January 2017 and many of our clients have had questions about what it is and when it applies. Answers to some frequently asked questions about the EHT are outlined below. If you have any questions about the EHT and how it applies to you, please contact us.

1. What is the vacancy tax rate?

The rate of the EHT is 1% of the assessed value of the vacant property.

2. Who does the empty home tax apply to?

The EHT applies to the owners of residential properties located in the City of Vancouver. If a property is used as the principal residence of the owner or by his or her friend or family member then the property is not subject to the EHT. The property must have been used as their principal residence for at least six months of the tax year (January 1 – December 31).

3. What is considered a principal residence?

The EHT By-Law defines a “principal residence” to mean:

The usual place where an individual lives, makes his or her home and conducts his or her daily affairs, including, without limitation, paying bills and receiving mail, and is generally the residential address used on documentation related to billing, identification, taxation and insurance purposes, including, without limitation, income tax returns, Medical Services Plan documentation, driver’s licenses, personal identification, vehicle registration and utility bills.

4. What is considered a vacant/unoccupied home?

According to the EHT By-Law:

Residential property is considered to be unoccupied in the following circumstances:

1. the residential property is not the principal residence of an occupier; or
2. the residential property is not occupied by a tenant or subtenant for a term of at least 30 consecutive days.

Residential property is considered to be vacant property if:

1. it has been unoccupied for more than 180 days during the vacancy reference period; or
2. it is deemed to be vacant property in accordance with this by-law.

5. When will the tax be payable?

The EHT will be due in April following the applicable tax year (for the 2017 tax year, the EHT will be due in April 2018).

6. How and when does the City decide if a property will be subject to the EHT?

There will be an annual declaration that all owners of residential property in Vancouver will receive in December from the City called a “Property Status Declaration’ (PSD). The PSD must be filled out and submitted to the City by the second business day of the following February, or the property will be deemed vacant and therefore subject to the EHT. The City will use the submitted PSD to decide if the property is subject to EHT, and if so, will mail an EHT notice in March.

7. Are there exemptions to the tax?

Generally speaking, the property may be exempt from the EHT if it is vacant as a result of one of the following reasons:

1. Major renovations to the property;
2. Illness;
3. The owner is deceased;
4. Ownership of the property changed during the previous year;
5. Strata rental restrictions;
6. Homes used for work purposes;
7. Court order; or
8. Otherwise restricted property.

8. My property is subject to the EHT. What can I do?

If the property is subject to EHT, you can of course leave the property as-is and pay the EHT. If you want to make sure the property will not be subject to the EHT, you can:

1. Rent your property for a minimum of 6 months of the year (for periods of at least 30 consecutive days) either by becoming a landlord yourself or hiring a property management company to rent the property;
2. Invite a friend or family member to occupy the property as their principal residence for at least 6 months of the year; or
3. Sell the property.