In the fall of 2016, at the request of the City of Vancouver, the Province amended the Vancouver Charter to provide City Council with the authority to impose, by bylaw, an annual vacancy tax on a parcel of “taxable property”. City staff’s Report to Council dated November 6, 2016 summarized the rationale for a vacancy tax bylaw and the results of public and expert consultation that staff had undertaken. The Report sets out specific recommendations and a draft of the proposed vacancy tax bylaw.
City Council approved the Report on November 16, 2016. A copy of the Report is available HERE.
The draft bylaw attached to the approved Report to Council sets out the details of the vacancy tax and the tax reporting and collection regimes, including provisions for appeals and penalties for non-compliance.
Proposed Timeline for Implementation
It is proposed that the infrastructure for collecting and managing the tax will be set up during 2017, with the first vacancy tax becoming payable in the spring of 2018, in accordance with the following timeline:
The Vacancy Tax
Vacancy Tax will be payable on “taxable property”, which is defined as “residential property” that is all of the following:
a) “vacant property”;
b) not exempt from taxation under section 373 of the Vancouver Charter; and
c) not exempt from the vacancy tax under the vacancy tax bylaw.
“Residential property” means real property classified as class 1 property (residential) under the Assessment Act. Examples of class 1 residential property are:
a) single family residences, duplexes and multi-family residences;
b) apartments and condominiums; and
c) nursing homes and rest homes.
Residential property is considered to be vacant property if:
a) it has been “unoccupied” for more than 180 days during the vacancy reference period; or
b) it is “deemed” to be vacant property in accordance with the bylaw.
The “vacancy reference period” means the twelve months of a tax year; in Vancouver, this is the period from January 1 to December 31 in any year.
Residential property is considered to be unoccupied in the following circumstances:
a) the residential property is not the principal residence of an occupier; or
b) the residential property is not occupied by a tenant or subtenant for a term of at least 30 consecutive days.
“Principal Residence” means the usual place where an individual lives, makes his or her home and conducts his or her daily affairs, including, without limitation, paying bills and receiving mail, and is generally the residential address used on documentation related to billing, identification, taxation and insurance purposes, including, without limitation, income tax returns, Medical Services Plan documentation, driver’s licenses, personal identification, vehicle registration and utility bills.
A parcel of residential property in respect of which a registered owner:
a) fails to make a property status declaration as required by the bylaw;
b) makes a false property status declaration;
c) fails to provide information or to submit required evidence to the Collector of Taxes in accordance with the bylaw; or
d) provides false information or submits false evidence to the Collector of Taxes,
is deemed to be vacant property and is subject to the vacancy tax.
Vacancy tax is not payable if the property:
a) was unoccupied for more than 180 days during the vacancy reference period:
i. because the registered owner is deceased and neither a grant of probate of the will of the deceased, nor a grant of administration of the estate of the deceased has been provided;
ii. because the occupier, tenant or subtenant is undergoing medical or supportive care;
iii. in order to develop the property or safely carry out major renovations; or
iv. because the property is subject to a court order that prohibits its occupancy;
b) was undergoing redevelopment or major renovations:
i. for which permits have been issued by the City, and
ii. which, in the opinion of the City Building Official, are being carried out diligently and without unnecessary delay;
c) was unoccupied for more than 180 days during the vacancy reference period because:
i. the residential property is a strata unit in a strata development;
ii. prior to the date of enactment of the bylaw, the bylaws of the strata corporation limited or prohibited rentals; and
iii. rental of the residential property is not permitted because the maximum allowable number of permitted strata rentals for the strata development has already been reached;
d) was unoccupied for more than 180 days during the vacancy reference period due to title being transferred during the vacancy reference period; or
e) is not the principal residence of the registered owner, but the registered owner occupies it for at least 180 days during the vacancy reference period for work.
Process and Timing for Payment
Property Status Declaration
On or before December 31 of each year, the Collector of Taxes must mail a property status declaration form to each registered owner of residential property whose name appears on the real property tax roll. The property status declaration form must be completed and returned by the registered owner on or before the 2nd business day in February.
Vacancy Tax Rate
The rate of the vacancy tax is 1 % of the taxable assessed value of a parcel of taxable property.
Due Date for Payment
The Collector of Taxes must mail a vacancy tax notice to each registered owner of taxable property on or before the 10th business day of March of each year. The amount stated as due and payable on a vacancy tax notice issued pursuant to the bylaw is due and payable by the registered owner of taxable property on or before the 10th business day of April of the year that the vacancy tax notice is issued.
Collection of Information
In addition to the requirement for a property owner to complete and submit a property status declaration form, the City’s Collector of Taxes may require a registered owner to:
a) submit evidence to verify a property status declaration and the status of the property; and/or
b) provide information at any time and for a period of up to two years after the applicable vacancy reference period.
A vacancy tax which is due and payable and remains unpaid as of the 10th business day of April of the year in which it is due and payable is subject to a penalty of 5%.
A person who violates any provision of the bylaw, neglects to do anything required to be done by any provision of the bylaw, or fails to comply with an order, direction, or notice given under the bylaw is guilty of an offence against the bylaw, and is liable to a fine of between $250 and $10,000 and the penalties imposed under the Vancouver Charter (fines per day and/or imprisonment up to 6 months).