Vancouver councillors debated the proposed empty-homes tax this morning, with some unexpected results. (Well, at least to me, so perhaps I’m clueless.)
The NPA councillors came out AGAINST the tax, which I thought would have been seen as very popular with their base. (See my story for their various reasons.)
And then Vision councillors started making noises about considering an even higher rate for the empty-homes tax than the max two per cent of assessed value that staff had recommended. Plus penalties higher than the current $10,000 that is the most Vancouver can charge anyone for any bylaw violation.
Things continue to evolve.
Along with all that, many more questions and unique scenarios continued to arise. Just to take you through various bits and pieces I’ve now learned:
- Airbnb doesn’t count as occupancy. So if someone gets audited and they’re not living at the unit, they need to prove they’re renting it out to avoid the tax. And showing revenue from Airbnb rentals won’t count.
- As long as one unit on a residential (single-family-house-type) property is occupied, the others can be vacant. So someone could live in a laneway house and leave the main house empty and not be charged the tax. An owner who decides to leave a basement suite or laneway house empty won’t be charged.
- Not decided yet how many months someone will have to occupy a unit to avoid the tax. Kathleen Llewellyn-Thomas, the new general manager of community services, was suggesting nine months might be the cut-off.
Happy to try to answer other questions you might come up with about unique scenarios.
9 responses so far ↓
1 For realz // Sep 21, 2016 at 5:04 pm
Thought I read somewhere prior that principal homes would be exempt regardless of vacancy length. But yesterday I read that the city now wants to consult the public on whether to tax snowbirds that are gone for six months?
2 francesbula // Sep 21, 2016 at 8:24 pm
I think we’re all getting a bit confused as various scenarios unfold.
As far as I know, if your house is your principal residence and you can prove it, you can leave it empty as long as you like without paying the tax (I think.)
If it’s a secondary residence, (i.e. you own a condo in Victoria or Shanghai or Toronto) but you use it a lot, i.e. nine months of the year is the number mentioned, you will likely not pay the tax.
If you have a home in Vancouver and one in Taipei and you spend six months in each, you
1. pay the tax if you can’t prove the house in Vancouver is a principal residence (no drivers’ licence, care card, not sure if city can ask for income-tax records, but maybe that, homeowner grant, etc.)
2. don’t pay the tax if you can prove that your primary residence is the Vancouver one.
More permutations to come.
3 Everyman // Sep 22, 2016 at 4:02 pm
Does anybody really believe anyone will volunteer to pay this? Certainly not the demographic it targets.
4 Solomon Wong // Sep 22, 2016 at 9:23 pm
The staff report cites an exemption for an owner or renter who is in care (page 11). The Mayor’s site describes this differently as a potential exemption if “Owner is in residential care with reasonable expectation of return.”
So if you are in a bad car accident and need rehab for 18 months, possibly longer – you should start worrying about added taxes/penalties. My experience with long term care and palliative issues is that you really can’t have anyone – and definitely not a city auditor ‘define’ an expectation of return. Many doctors do suggest ultimately that people return home for their final days.
I would really hate in the bluntness of the proposed instrument (and inconsistency between the mayor’s website and staff report) that added financial pressures be put on people with long term illness to rent out their places.
5 A Taxpayer // Sep 23, 2016 at 9:10 am
Does the Mayor really believe that someone clever enough to amass a fortune in China and get it out of that country and into Vancouver real estate is not going to be able to find a way to avoid paying his empty house tax?
6 Lysenko's Nemesis // Sep 26, 2016 at 1:44 am
Here’s another one. What if you have a nice condo with 3 bedrooms and the going rate for renting is $5 a foot (Gastown can be easily $3). Your 3 bed is around 2,000 sq’, so that’s $10,000.00 per month. Gregor want you to rent it out so people are not having trouble finding a pad but you’re having difficulty getting a renter, so you drop it to $4. Only $8,000.00 per month, plus $400 parking.
Is Gregor still going to nail you if you’re running an ad, you’re charging the going rate but there are no takers?
How about if the market goes south and there are loads of rentals on the market? Is Gregor going to rescind his law or punish all owners in a crashing market?
Prediction. It ain’t gonna bring in a nickel. It’s all fluff.
7 francesbula // Sep 26, 2016 at 9:46 am
At the moment, it sounds as though the authorities will allow for at least three months of vacancy in a secondary residence. I am guessing that if someone can’t get their place rented within three months in a near-zero-per-cent vacancy world, they will start to question the owner about intentions. How they’ll prove intention to not rent, your guess is as good as mine.
8 penguinstorm // Sep 28, 2016 at 12:42 pm
That confusion cuts to the heart of the issue though. It’s really easy to say “tax empty homes” and a lot more difficult to define what a clearly taxable empty home is. Take the example of my friend who was not in care but her father was, and she was away.
If I transfer jobs and I legally required to sell my place? What if it’s a year–maybe I don’t want to rent for that only and I’m worried about getting into the market.
Lots of grey. Not a lot of black and white. Virtually none, really.
That’s why this so often seems to descend into cries of racism: people want to tax people who are from “there” (insert your country of choice) and are just here to make money.
Frances: you’ve written plenty about the grey, and I’m glad because someone has too. This came to mind:
http://www.theglobeandmail.com/real-estate/vancouver/meet-the-wealthy-immigrants-at-the-centre-of-vancouvers-housingdebate/article31212036/
but I think there was something more recent.
9 penguinstorm // Sep 29, 2016 at 6:42 am
I can’t wait for the Stasi’s records to go public so we can see the neighbour-on-neighbour ratting out that’s bound to happen.