Almost $40 million Collected Under Vancouver’s Empty Homes TaxNovember 22, 2019
written on behalf of Feigenbaum Law
We’ve previously blogged about Vancouver’s Empty Homes Tax, including the story of a a homeowner who sued the city after being subject to a $249,000 vacancy tax on a property on which she does not reside.
Now, we continue our blog series by diving into some of the effects that the Empty Homes Tax has had since its introduction. The National Post reported this week that, since 2016, the City of Vancouver has collected close to $40 million in net revenue from property owners under the tax.
The Empty Homes Tax
To recap, the Empty Homes Tax, sometimes also referred to as the the vacancy tax, is a tax of 1% of the assessed taxable value of a property. It was introduced in 2016 in an effort to return underused or vacant properties to the market as long-term rentals for residents actually living in Vancouver.
Under the tax, Vancouver property owners are required to submit an annual property status declaration to determine whether their property is subject to the tax. Any properties that are deemed to be empty will be subject to the levy.
Exemptions to the Empty Homes Tax include properties that:
- Are used as a principal residence by the owner, a family member or friend of the owner, or other permitted occupier for at least six months of the relevant tax year;
- Are rented for residential purposes for at least six months of the relevant year, in periods of 30 or more consecutive days; and
- Meet the criteria for one of the listed exemptions
Money Collected Under the Tax
Earlier this week, the City of Vancouver released its 2018 empty homes tax annual report. The report concluded that the city has collected almost $40 million since the introduction of the Empty Homes Tax from property owners who do not live in their properties full time, but who have chosen not to rent out the properties in their absence.
The revenue collected has been used for a number of ventures, including:
- the funding of affordable housing initiatives, such as the Community Housing Incentive Program, intended to provide grants to housing providers to make social and co-op housing more affordable;
- the creation of a Renter’s Equity Line to answer questions on renter protection policies and assist renters in finding building-specific
information (e.g. the status of redevelopment or renovation permits);
- the development of renter services grants to support non-profit community-based programs that assist and empower Vancouver
renters to understand and pursue their rights, and/or secure their housing;
- the development of a community-based Renter Centre (slated to open in 2021).
A Decrease in Vacant Properties
The report notes that the Empty Homes Tax also led to a decrease in vacant properties. Specifically, the report indicates that:
- there were 22-per-cent fewer vacant properties in Vancouver in 2018 compared to 2017 (1,989 compared to 2,538); and
- the number of properties declared “tenanted” rose by seven per cent.
Most of the properties listed as vacant for both years were condos, with the highest number of vacant properties found in downtown Vancouver. Data showed that the West End had the highest recorded percentage of unoccupied homes relative to the number of residential properties in the area.
Viewpoints on the Vacant Homes Tax
Vancouver Mayor Kennedy Stewart has said, of the tax:
The main objective of Vancouver’s empty homes tax is to influence property owners to put their empty properties on the rental market, and the data shows that is happening…For those who choose to keep their properties unoccupied, we appreciate their contributions to the funds that are supporting various, much-needed affordable housing initiatives across the city.
Sandra Singh, the City of Vancouver’s general manager of art, culture and community services noted of additional projects that are in the works:
From securing safe, warm homes in the Downtown Eastside, to increasing support for renters and providing grants to non-profit housing providers, lives are being changed by the revenue…We’re looking forward to reaching more residents across Vancouver as the projects and programs continue to grow.
City staff have made a number of recommendations for going forward, which will be presented to city council this month. We will continue to follow the effects that this tax has been having on real estate in Vancouver and will provide updates as they become available.
How Can Feigenbaum Law Help?
As always, at Feigenbaum Law our lawyers track developments in policy and law across Canada and in the U.S. to be able to best serve our clients.
Our rare combination of U.S. and Canadian law and cross-border accounting designations means we have the skills and knowledge to provide the nuanced advice necessary in exceptional matters. We have a reputation throughout the industry for our creative, custom solutions to complicated tax problems.
Our experience and reputation speaks for itself. We are regularly referred complex files by accountants, lawyers, and financial planners. We have the expertise to work with your clients on their tax issue while you continue to service their more general needs. We offer other professionals the opportunity to expand their own services beyond what a general firm can do to include our highly niche area. We routinely work on the thorny pieces of larger client portfolios in concert with other professionals.
Contact us to learn more about how we can help or call us at (905) 695-1269 or toll free at (877) 275-4792.