Whether you own or plan to purchase or sell residential property in the City of Vancouver, you’ll need to be aware of the new annual 1% Empty Homes Tax (also known as the Vacancy Tax). For example, if the tax applies and your property has an assessed value of $1,000,000, the tax would be $10,000.
The Empty Homes Tax will apply if, for more than 180 days of the year, the property is:
- not used as a principal residence (the place where an individual usually lives); or
- not rented to a tenant living in the property.
Certain exemptions may apply.
Owners must submit a property status declaration each year. The 2017 declaration is due by February 2, 2018. The City mails the form to the registered owner each year. Failure to submit your declaration by the deadline will result in your property being deemed vacant and charged the Empty Homes Tax as well as a fine of at least $250.
Be proactive because if the seller does not submit the declaration or otherwise pay the tax, then the buyer must pay it. A buyer can submit the declaration, and claim an exemption if applicable, before the deadline if ownership was transferred on or before December 31 of the prior year. If the buyer does not plan on living in the property as a “principal residence” or renting the property out, then the buyer should be prepared to pay the tax unless an exemption applies.
If the property has been sold, then the seller can only submit the declaration before the transfer. Only the current registered owner can submit a declaration, or provide any related submission. Once a registered owner has submitted a declaration, additional owners will not be able to submit a second declaration for that year.
If you would like more information on the Empty Homes Tax, including the exemptions, or to learn how the tax may affect your real estate transaction, please contact one of the lawyers in our Real Estate group.