Vancouver’s rental shortage is one of the factors making its housing market so competitive. The City has announced efforts to crackdown on empty homes. Vancouver aims to be more accessible for locals, and the empty home tax, combined with the foreign buyer tax introduced last year, has cooled the single family market. “Housing is for homes first, and as business and investments second – we need a tax on empty homes to encourage the best use of all our housing, and help boost our rental supply for locals,” Mayor Gregor Robertson stated. The goal is to provide 25,000 more much-needed rental units.
During November 2017, homeowners received instructions on how to submit a property status declaration. The due date for tax declaration forms is February 2nd, 2018. If no submission is made, properties are assumed to be empty. When you purchase a home, it is worth checking with the City if a declaration was made by the previous owner.
If a property (detached or attached) has been vacant more than 6 months in 2017, but the title is transferred in 2017, then the empty home tax won’t apply. However, if the title is transferred in 2018, the tax will apply for the 2017 tax year. This isn’t affected by how much the owner will be residing in the home. The seller needs to be aware that 1% of the assessed value will be an obligation to pay on closing. The buyer should ensure that the tax is accounted for on closing, so they are not culpable when the tax is due on April 16, 2018. We will need to ensure our clients are aware and notaries and lawyers take appropriate steps on closing.
I’ve spoken to Carolynne Maguire at BC Notary, and a process is being established for dealing with closing. Make sure you ask the questions and all parties are aware of what tax obligations may be in play.
Here is a recent article on this issue as well as a link to the City of Vancouver site. As always, talk to one of us if you have any questions about empty home rules. You can also contact the City at 311 and speak to someone in the Vacant Home Tax department.
Picture Source: City of Vancouver