Absentee luxury homeowners 'inconvenienced' by Vancouver's empty homes tax: Documents
Homes over $15 million should have been exempt from empty homes tax, law firm argued in newly released documents.
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The City of Vancouver’s new empty homes tax has riled secondary home owners, but another group also had a problem with the tax.
Documents, obained by Metro through Freedom of Information, reveal that Peter Fairey, a lawyer with Gowlings WLG, wrote to the city in December 2016 about his firm’s concerns that the tax could have an outsized impact on owners of very expensive homes who do not live full-time in Vancouver.
Fairey said that renting out a luxury home would not contribute to creating affordable rental — the stated goal of the city’s new tax.
“Renting a house assessed at $50 million is not going to relieve Vancouver’s housing shortage as no person who needs to rent can afford even its operating and staffing costs," Fairey wrote the city.
“Yet the city is imposing a $500,000 per year vacancy tax on such a single house in addition to already substantial property taxes paid on such a property.”
Fairey goes on to detail the positive contribution such homes make to Vancouver’s economy.
“These specialty homes provide full-time employment for their maintenance and operation as many have sophisticated but very complicated operating systems and features. Their owners are often here several months of the year enjoying the properties and contributing to the local community and economy but these are not their principal residences (as their owners sometimes own homes in multiple countries).”
Fairey writes that these homeowners would never have built these homes in the first place had they known they would have to pay an empty homes tax. And he says Vancouver’s red-hot real estate market also hits the pocket book of these multi-million dollar homeowners: “Assessed values are anticipated to go up by 30 per cent this year so the excessiveness of the vacancy tax on the top end of the scale will only worsen.”
Fairey suggested the city exempt owners of properties valued at $15 million or over from paying the tax. That’s something the city declined to allow, saying in a June 23 staff report that all or part of the home could be rented out and therefore occupied.
In correspondence with Fairey, Heidi Granger, a lawyer for the city, noted that the tax applies to the entire property parcel, meaning that if a coach house on the property was rented out, the tax would not apply. In May 2017, Fairey wrote to Granger to say that a client had leased his house "at considerable inconvenience."
Starting this year, all homeowners must make a declaration to the city as to whether or not their home is occupied for at least six months of the year. Homes that are empty for more than six months will be subject to the empty homes tax of one per cent of the property’s value.