A recommendation from the City of Vancouver staff suggests a one per cent empty homes tax should be applied on all non-principal residences that are unoccupied for six full months of the year or more. The tax is expected to help tackle the city’s rental housing crisis.
In September, the city announced it was going ahead with the public consultation on the proposed tax, which is set to go into effect in 2017.
READ MORE: Vancouver’s empty home tax approved by council to go to public consultation
The tax will target secondary properties used as a business holding that could potentially be in the rental market. A principal residence by owner, tenant or licensee will not be subject to empty homes tax.
It will be up to the owners to declare their principal residence to the city.
Vacant residential land will also be subject to the tax.
The city says the one per cent tax was determined through consultation with industry experts and the public.
The following properties will be exempt from the tax:
- The property that’s undergoing major renovations, or is under construction or redevelopment.
- 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.
WATCH: Empty home tax could hit Vancouver homeowners by 2017
The empty homes tax will be the first in Canada and it is estimated it could generate two million dollars in revenue, but the mayor insists the tax is meant to help increase rental vacancy rates, which have been historically very low in Vancouver, and not to generate revenue.
The city estimates there are more than 10,000 year-round empty homes and roughly 10,000 more “under-occupied” homes in Vancouver.
The mayor’s officer has also previously said should the tax be successful at increasing rental vacancy rates, it could be reduced or eliminated completely.
Robertson has also reiterated that most Vancouver homeowners will not be affected by the change, because principal residences or properties that are rented long-term will not be subject to the tax.
In July, the provincial government said it supports a tax on vacant homes in Vancouver, but that the legislation specifying the tax won’t be ready until 2018, at least a year later than the deadline the City of Vancouver had proposed.
~With files from Paula Baker and Amy Judd
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