The Metropolis of Vancouver imposes an annual Empty Houses Tax (“EHT”) on vacant Vancouver homes and residential lands to encourage house owners to tenant the homes and encourage building of latest housing on empty tons. The Province imposes its personal Hypothesis and Emptiness Tax (“SVT”) and the Federal Authorities imposes the same Underused Housing Tax.
In April 2023, the Metropolis elevated the EHT from 3% to five% for the 2023 emptiness reference 12 months ending December 31, 2023. Because the declaration interval for 2023 doesn’t finish till February 2024, the 5% EHT, whereas enacted, has but to be levied. The EHT and SVT have particular exemptions relevant to homes and growth lands.
On Could 10, Vancouver Metropolis Council accredited the next essential adjustments to the EHT beneficial by Metropolis employees primarily based partly on an Ernst Younger report:
CHANGE
|
IMPACT on EHT LIABILITY
|
NEW or AMENDMENT
|
|
Tax Fee Discount
|
The EHT will scale back from 5% to three% for the 2023 emptiness reference 12 months.
This addresses partly the priority {that a} greater EHT will immediate extra false declarations and better audit and compliance prices.
|
Modification to the prevailing 5% fee.
|
|
Renovation Exemption
|
An proprietor will now not be required to have their constructing allow issued by July 1 to qualify for the renovation exemption. As an alternative an proprietor might qualify for an exemption supplied a constructing allow is issued anytime inside the emptiness reference 12 months.
This addresses compliance points linked to the challenges in acquiring a constructing allow by July 1 given the Metropolis’s backlog and delays in processing constructing permits.
|
Modification to an current exemption efficient within the 2022 emptiness reference 12 months.
|
|
Redevelopment Exemption
|
An proprietor will now not be required to submit a rezoning utility or growth allow utility to the Metropolis by July 1 to qualify for the redevelopment exemption. As an alternative, an proprietor might qualify for an exemption supplied the submission is made anytime inside the emptiness reference 12 months.
This addresses compliance points linked to challenges in submitting a rezoning utility or growth allow utility by July 1 in any 12 months, given the Metropolis’s backlog in its means of reviewing such issues earlier than such functions may be formally submitted.
|
Modification to an current exemption efficient within the 2022 emptiness reference 12 months.
|
|
Rental Restriction Exemption
|
This addresses compliance points with current strata restrictions on leases which have been prohibited by amendments to the Strata Property Act as of November 2, 2022.
|
Modification to an current exemption to adjust to the Constructing and Strata Statutes Modification Act that prohibits rental restrictions for Strata properties.
|
|
Vacant Unsold New Stock Exemption
|
Retroactive to 2022, an proprietor will now be capable of declare a yearly exemption for unsold, vacant, new stock starting the 12 months after the occupancy allow has been obtained till the stock is bought or occupied.
This exemption, which has similarities to an exemption from SVT, addresses long-standing issues with EHT on unsold new housing stock which can’t be rented pending sale with out triggering GST.
The report alternatively requests Council to think about the exemption for the 12 months of completion plus one subsequent 12 months. Council voted towards this feature.
|
New exemption just like an current exemption from SVT.
|
|
Uninhabitable Properties Exemption
|
For properties that can not be occupied for no less than 6 months within the emptiness reference 12 months as a result of a hazard or catastrophe, house owners will likely be exempt within the 12 months of the occasion and the next 12 months.
|
New exemption just like an current exemption from SVT.
|
|
Medical Functions Exemption
|
Properties used as a secondary residence located nearer to medical remedy will likely be exempt for yearly licensed crucial by a medical practitioner.
|
New exemption just like an current exemption from SVT.
|
|
Late Declaration Deadline
|
Homeowners can have an extra alternative to declare their property standing and reverse the deemed tax levy after the late declaration deadline (at present 1 12 months and 5 months after the preliminary deadline) supplied their declaration is made inside 5 years from the tax reference date and is supported by proof. This extension will apply retroactively for five years.
|
Modification to an current EHT exemption to permit for larger flexibility for people who have been eligible for an exemption however failed to use in a well timed method.
|
|
Late Declaration Penalty
|
If the late declaration deadline is amended, house owners who fail to declare property standing earlier than the late declaration deadline will likely be charged an extra penalty of 5% of the tax levy on high of the present $250 penalty for failing to declare standing previous to preliminary declaration deadline.
|
Modification to an current EHT penalty.
|
|
Graduated EHT Fee for Chronically Vacant Properties
|
Along with the above suggestions, the Metropolis report asks Council to think about a graduated EHT fee that will increase for properties which are chronically vacant.
|
Council despatched this advice again to Metropolis employees for additional overview.
|
You probably have any questions in regards to the Empty Houses Tax, please contact James Fraser or one other member of Lawson Lundell’s Actual Property Group.
