The City of Vancouver has approved a program that will introduce a one per cent tax on empty homes, the first of its kind in Canada. Targeting as many as 22,000 empty or under-utilized homes in Vancouver, the Empty Homes Tax will apply to those properties that are neither an owner’s principal residence nor being rented on a long-term basis. Vacant residential land will also be subject to the tax.
“In Vancouver’s rental housing crisis, the city can’t afford to sit on the sidelines while more than 20,000 empty and underused homes hold back badly-needed longer-term rentals,” says Mayor Gregor Robertson.
“The Empty Homes Tax won’t solve the rental crisis, but it’s one piece of the puzzle to boosting rental supply and bringing relief to renters by turning thousands of empty and underused homes into rental properties. In this tough housing market, it’s unacceptable for so much housing to be treated as a commodity when people are desperate for an affordable, secure place to live.”
The tax will be equivalent to one per cent of a home’s assessed value, meaning a person with a $400,000 condo would pay an additional $4,000 a year in taxes.
Most Vancouver homeowners, including snowbirds, will not have to pay the Empty Homes Tax. Principal residences — whether of the registered owner or his/her family member— are not subject to the tax, nor are properties that are rented for six months of the year or more, in periods of at least 30 consecutive days.
Exemptions to the Empty Homes Tax include:
• The registered owner uses the property for at least six months of the year for work within the City of Vancouver, but claims a principal residence elsewhere
• The registered owner, occupying family member, or tenant is undergoing medical or supportive care
• Ownership of the property changed during the year
• The owner is deceased and a grant of probate or administration is pending
• The property is undergoing major renovations, or is under construction or redevelopment, and permits have been issued
• The property is subject to strata rental restrictions as of November 16, 2016
• The property is under a court order prohibiting occupancy
• 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
The tax will be implemented in early 2017 with the first payments due in 2018.