The Empty Homes Tax Procedure Explained
The Empty Homes Tax is an annual tax introduced by the City of Vancouver in late 2016. The purpose of the Empty Homes Tax is to reduce empty or under-utilized residential properties within the City of Vancouver. Properties that are deemed to be vacant are subject to the tax.
As of 2020, the tax rate has been increased from 1.0% to 1.25% of the property’s assessed value.
Most property owners will qualify for an exemption from the Empty Homes Tax. However, property owners must carefully follow the Empty Homes Tax procedure for claiming an exemption to qualify. In today’s blog post, I will review and explain the various steps.
The process to claim an exemption begins with a property status declaration. The City of Vancouver (the “City”) will send you a property status declaration document by mail. The document will contain instructions on how to file a property status declaration. The document will also provide you with a folio number and access code which are necessary if you are making your declaration online.
If your property is jointly owned, only one registered owner needs to make the declaration. Any additional owners will not be able to submit a second declaration.
If you do not make a property status declaration, then your property will be deemed vacant and subject to the tax.
The property status declaration is based on a system of trust. The City expects that property owners will be honest and forthright when making their property status declaration.
To ensure that property owners do not make false or incorrect declarations, property status declarations may be subject to an audit. A false declaration can result in a fine of at least $250.00 and up to $10,000.00.
If your property is selected for audit, the City will request additional evidence by documents to support your declaration. What documents the City will request from you will depend on your property status declaration. For example, if your property is your principal residence, then the City will ask for documents that show your address, such as a driver’s license or income tax return. If your property is being rented, the City will ask for documents that prove the tenancy such as a residential tenancy agreement.
Failure to provide the documents requested by the City may result in your property being deemed vacant and subject to the tax. This is why it is important for property owners to be proactive and prepare their documents in advance in case they are selected for an audit. I will explore the audit process in greater detail and provide tips on how to prepare in a later blog post.
If your property has been selected for audit, you may wish to consult a lawyer for assistance. The audit process can be confusing, and there are other documents which may support your case. A lawyer can assist you with navigating the audit process and preparing your documents which may ultimately save you the time, stress and expense of going through the complaint and/or review process.
Upon completion of their audit, the City will determine whether your property status declaration was correct. If the City decides that your declaration was incorrect, the City will re-assess your property accordingly.
If you believe that the City’s audit is incorrect, you may submit a notice of complaint to have a vacancy tax review officer review the audit. There are two grounds for a complaint: during the audit, either there was an error or omission by the City, or an error or omission by you. You must state your grounds for your complaint in your notice of complaint.
If your complaint is accepted, the review officer may request additional documents from you. If you fail to provide the requested documents, the review officer may decline your complaint. The complaint process is also an opportunity for you to submit additional documents that support your case if any documents were missed during the audit.
After reviewing your complaint, the City will provide you with a written letter of their decision. If you still believe that the City is wrong, you can request for a review of the decision, which will be considered by a vacancy tax review panel.
You must request the review within 90 days, or your request for review may be denied.
The review process is the final step in the Empty Homes Tax process. However, if you believe that the City’s decision remains incorrect, you may have recourse through the Court.
I am always here to help, Contact me Andrew Peng at 604.371.2582.