Will Your Non-Principal Residence Be Unoccupied for More than 6 Months?
Vancouver will have an Empty Homes Tax in place, effective January 1, 2017, with staff reporting on the Tax’s next steps to Council on Tuesday.
Targeting the known 10,800 year-round empty and roughly 10,000 more under-occupied homes in Vancouver, staff are recommending that all non-principal residences (except those qualifying for an exemption) which are unoccupied for six full months of the year or more will be subject to a 1% Empty Homes Tax. Vacant residential land will also be subject to the Tax.
“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. “In a rental housing crisis, it’s unacceptable for so much housing to be treated as a commodity when people are desperate for an affordable, secure place to live. Housing is for homes first, and as investments second.”
Who won’t be subject to the tax
Most Vancouver homeowners, including snowbirds, will not be subject to the Empty Homes Tax. Principal residences will not be charged the Empty Homes Tax, nor will properties that are rented long-term (with a tenancy agreement), or for at least 30 days in a row for a minimum of six months in aggregate over the course of a year. For example, a homeowner renting their investment property for six 30-day terms throughout the year will be exempt from the tax, even if those six 30-day terms are not consecutive.
How the tax was determined
The 1% Empty Homes Tax rate was determined through consultation with industry experts and the public. Applying a 1% tax in addition to existing property tax aligns with current business property taxes, reinforcing the principle that housing used as a business will be taxed as such – particularly as Vancouver grapples with a housing affordability crisis.
Tax exemptions
Through public and stakeholder consultation, staff have confirmed exemptions for the Empty Homes Tax, including:
- The property is undergoing major renovations, or is under construction or redevelopment (with permits).
- The registered owner (or other occupier) is undergoing medical or supportive care.
- The owner is deceased and grant of probate or administration is pending.
- Ownership of the property changed during the previous year.
- The property is subject to existing strata rental restrictions.
- The registered owner uses the property for six months of the year for work purposes but claims principal residence elsewhere.
- The property is under a court order prohibiting occupancy.
- The property is limited to vehicle parking or the size, shape or inherent limitation such that a residential building cannot be constructed.
Consultation
Earlier this fall, Council approved the Empty Homes Tax framework with the goal of putting homes back into the long-term rental market. Over the last month, we have been consulting the public and stakeholders on the final details of the tax, collecting over 10,000 responses through Talk Vancouver, public open houses, and email correspondence.
We’ll keep you up to date as this unfolds.