The city of Vancouver is currently facing several lawsuits over its controversial Empty Homes tax.
The levy was introduced in 2016 as an attempt to tackle the city’s rental problem. Homeowners in Vancouver who leave properties unoccupied for more than six months out of the year must pay a one per cent tax on the unit’s overall value.
CNN reports that one lawsuit was filed by the wife of a Chinese multimillionaire, who was fined $200,000 for leaving her $20 million mansion empty. The ocean-view property was purchased by He Yiju in 2015. Her husband Zheng Jianjiang, a prominent politician in China who has been repeatedly featured on Forbes China Rich List, is not named on the property listing.
Last year, the city ruled that He was subject to the tax, which she denies. In a petition to the province’s top court, He’s legal team claimed that the house was about to be renovated and was waiting for city-issued redevelopment permits. Houses that are under construction or were bought or sold within a year are exempt from the tax.
Vancouver’s housing market is notoriously tough on renters as prices for properties have drastically spiked in the last decade. The Empty Homes Tax was introduced to help manage the city’s lopsided property market by encouraging landlords to convert empty or under-used housing into rentals.
According to a report by Global News, more than 2,500 properties in Vancouver were considered to be vacant during the first year the tax was in place, which earned the city $38 million in 2017. After an audit was conducted on an additional 6,000 properties, 331 more homeowners were charged, earning the city another $6.2 million.
The City of Vancouver is now facing three lawsuits, in addition to He’s, by homeowners and developers who claim they applied for permits or showed proof that they lived on the property within the relevant timeframe.
Jufen Wang, who owns a Kitsilano apartment, was charged $3,881. He’s filed a petition claiming he provided documents such as bills that proved he lived at his home for more than six months. However, some of the bills were in his daughter’s name, who Wang said has power of attorney. The city dismissed the documents because they were addressed to a different person.
In another petition, Sau Po Wong claims he accidentally submitted documents from 2018, rather than 2017, during an audit of his Shaughnessy home. Wong says he was out of the province when the city alerted him that his audit was denied and he would have to pay a tax bill of $128,310.
Developers Pure West Financial Holdings Group Inc have also filed a petition over the tax on a home that was set to be demolished in place of a new building.
The B.C.-based developers say in their filing that they were charged the tax because the city didn’t grant them the necessary building permits before July 1, 2017, which made it ineligible from exemption. The developers contend the exemption guidelines didn’t list that date as the deadline and failed to list a date for when building permits should be issued by.
The city responded to the petition by asserting that the vacancy tax review panel was firm on its decision in favour of the city’s action.