Two Vancouver residents are taking the city’s six-year-old empty-homes tax to court, arguing it violates the Charter of Rights and Freedoms and should be declared invalid.
The residents, Lucy Dan and Danice Macleod, jointly filed a lawsuit late last month, alleging the tax has created extreme psychological and financial stress for both of them, even though their circumstances are somewhat different.
Ms. Macleod owns a home in west-side Vancouver that has been in her family for 50 years. She has another property on leased land in Banff, which she is required to declare as her principal residence in order to maintain the lease. She has avoided having to pay the empty-homes tax so far by letting a former romantic partner live in the Vancouver home, although she says in court documents that this arrangement is both personally painful and uncertain.
She says in her filing that the tax has caused a severe impact on her life and is “an endless source of stress and worry for me.”
Ms. Dan, a Vancouver resident since 2011, bought a west-side property where a burned-out home had been demolished, hoping to get a mortgage and build a new house there, according to the documents. But she says in her court filing that she has been unable to obtain financing because the land is empty. She also hasn’t been able to sell the property, originally purchased for $3.5-million. Because it is unoccupied, she was assessed a $113,000 empty-homes tax for the 2022 tax year.
The tax, which went into effect in 2017, applies to residential properties that are unoccupied for more than six months during the tax year, with a few restricted exceptions. It is currently levied at 3 per cent of a property’s assessed value. Ms. Dan and Ms. Macleod both say it was created without a public hearing and is vague about its goals and application, among other issues.
Their lawsuit is the latest in a series of legal challenges related to the tax. Outside of court, there have also been many complaints from owners, and many appeals of tax notices under the city’s own adjudication process.
It’s not clear how many people may have sued over the tax, nor is it clear how many have settled without going to court.
In 2019, one property owner in what is called “billionaires’ row,” on Belmont Avenue in West Point Grey, convinced a court to order a review of a $249,000 empty-homes tax on a house that was uninhabitable and filled with asbestos.
Another owner, a Richmond psychiatrist, sued the city in 2019 after being charged the empty-homes tax two years prior. He said he had demolished a home on the affected property in order to build a new multifamily project, and had missed his opportunity to appeal the tax because the city’s notices had been sent to an old address.
That lawsuit has not had any new documents filed since it was initiated, and the city responded, in 2019.
The tax was put into effect after several years of widespread concern that wealthy foreign investors were buying up houses and condos in Vancouver and leaving them empty. Advocates of the tax said this was worsening the city’s housing shortage, and leading to increases in housing prices.
Any money collected through the tax is put toward an affordable-housing fund in the city.
The city’s 2022 report on the tax said the city had assessed $68.8-million in levies and penalties that year, but had only collected $32.5-million. In 2020, it assessed $37.9-million in levies and penalties and collected $27.9-million.
The tax is generally viewed very favourably by the public in opinion polls, but it has been opposed from the beginning by groups of landowners.
Some have complained, like Ms. Dan and Ms. Macleod, that it is an infringement on personal rights. And some have complained about the way it penalizes not just foreign investors, but also local people with long-time ties to Vancouver who are trying to maintain residences in the city so they can visit with family or access medical care.
Others have complained that the city’s system for auditing homes has led to problems for owners, some of whom have had to spend significant amounts of time and money proving to the city that their properties are occupied.
In 2021, the city audited just over 7,000 properties and found only 104 that were unoccupied when their owners had claimed otherwise.
Frances Bula