Declaring an empty homes tax exemption? Be ready to back it up with proof, lawyer says

Anyone asking for an exemption on Vancouver's empty homes tax should be prepared to back up their claim in case they are audited, says a lawyer with experience helping people navigate the relatively new system.

Homeowners in Vancouver have until end of day Tuesday to submit their declaration on the tax, which came into effect in 2018 to help fund affordable housing initiatives in the city. 

Owners are taxed at one per cent of the 2019 assessed taxable value of the home if it is not their principal residence. All homeowners are required to submit a declaration by Feb. 4.

Property status declarations may be subject to an audit process by the city — and it's best to prepare for it, as the process can feel intimidating, according to Vancouver lawyer Andrew Peng.

"The moment they receive an audit notice, they are already put in a difficult position. The audit process is foreign, it's daunting for most people. They don't know what they are doing," said Peng on The Early Edition on Monday.

Peng said exemptions for the tax exist for properties that are occupied by a family member or friend of the homeowner.

If this is the case for at least six months of the year, the City of Vancouver does not require documentation at the time of the declaration.

But if the owner of the property is audited, the city will ask for documents to prove the home is occupied.

According to the city, supporting documentation can include: ICBC insurance and registration, government-issued personal identification, income tax returns, employment contracts and pay statements. 

Peng said there is also an exemption for properties that were unoccupied because of major renovations. In that case, homeowners must have proof the city issued permits for those renovations.

A complete list of exemption reasons are available at the city's website.

Homeowners who fail to declare by the deadline will be penalized $250.

Anyone who wishes to have their assessment reviewed can do so by April 16, 2020, which is also the deadline to pay the tax.

To hear the complete interview with Andrew Peng on The Early Edition, tap the audio link below: