Empty Homes Tax: Audits and Appeals
If you are a City of Vancouver residential property owner, you may be subject to an audit of your 2017 Property Status Declaration. The City of Vancouver may also have recently denied your request for an exemption to the Empty Homes Tax (EHT). This post outlines how to deal with empty homes tax audits and appeals in the City of Vancouver.
What Happens if You Are Audited or Your Property Status Declaration Exemption is Rejected?
A registered owner who has received a vacancy tax notice or supplementary vacancy tax notice may submit a complaint (i.e. an Appeal) regarding the decision to impose the vacancy tax on one or more of the following grounds:
- There was an error or omission on the part of the City of Vancouver that resulted in the imposition of the vacancy tax (i.e. the city has made a mistake);
- There was an error or omission on the part of a registered owner in completing the property status declaration that resulted in the imposition of the vacancy tax (i.e. You made a mistake).
What are the deadlines to file an appeal?
Vacancy Tax Notice – Notice of complaint submissions if you were deemed or declared vacant are due by the 10th business day of April. For 2017 the deadline of April 13th, 2018, has already passed for these types of notices. For 2018 and future years the deadline remains open.
Supplementary Vacancy Tax Notice – However, for supplementary vacancy tax notices you may submit an appeal within 28 days of the date of issue noted on the supplementary vacancy tax notice.
How to Appeal
The Empty Homes Tax Bylaw provides several specific requirements regarding the contents of the appeal that must be met when filing the notice of complaint.
Although it is possible to file an appeal on-line, for various reasons we are currently advising our clients to file via registered mail.
What Happens When You Appeal?
The bylaw requires that the vacancy tax review officer must within a reasonable time, consider the notice of complaint and any supplementary information and evidence, make a determination on the complaint and advise the registered owner in writing of the determination.
Note unlike the deadlines imposed on the taxpayer in filing their appeal there are no deadlines imposed on the City of Vancouver other than a rather unclear limit of “a reasonable time”. At the time of writing the City of Vancouver has also not released any statistics regarding the number of appeals filed and/or the length of time taken to provide written rulings regarding these appeals.
If you are successful, the vacancy review officer must rescind the vacancy tax notice.
If you are not successful, it is possible to file a further appeal as explained below.
What if Your Appeal is Not Successful?
Once you have received a determination letter stating your property remains subject to the tax, you have the right to further appeal. The Empty Homes Tax Bylaw provides that you can submit a request for review. Again, there are specific requirements regarding review requests that must be met.
What is the Deadline to File a Secondary Appeal?
For unknown reasons and to add confusion, the City of Vancouver has made this a shorter deadline. The deadline to submit a review request is within 21 days of the date of deemed receipt of the determination of the vacancy tax review officer. Note that the determination of the vacancy tax review officer is deemed to have been received by the registered owner four days after mailing regardless of whether you actually receive it within that time or not.
Who will hear your review?
The City of Vancouver has advised that all review requests will go to an external panel at the Alternative Dispute Resolution Institute of British Columbia for a property status determination.
What Happens During the Review?
The bylaw requires that the vacancy tax review panel must within a reasonable time, consider the review request based on the materials provided in the review request and without a hearing make a determination on the review and advise the registered owner in writing of the determination. Again, there are neither timelines nor deadlines for this process.
Interestingly, the bylaw is specific that no hearing is to be held and therefore all decisions will turn on the quality of the written materials. In addition, the review panel does not have the ability to request additional information from the taxpayer regarding their appeal but must rely exclusively on the evidence provided to the vacancy tax review officer, a City of Vancouver employee. This appears to impose a systematic disadvantage to those who may not be well versed in the appeal/review process or without the ability to prepare high quality and persuasive written materials. It is unfortunate that the City of Vancouver has not allowed taxpayers the opportunity to elect to present their cases in front of the panel, or alternatively for the panel to request additional evidence, so that all relevant facts can be ascertained.
If you are successful, the vacancy review panel must rescind the vacancy tax notice.
What if Your Review is NOT Successful?
The City of Vancouver says that “This is the last appeal stage to determine the property status and the status given by the review panel is considered final.”
However, the bylaw is a law established by the City of Vancouver and is therefore potentially subject to legal challenge. There are various legal grounds on which bylaws may be challenged. At the time of writing no legal challenges have been filed against the Empty Homes Tax Bylaw. However, it is worth noting that Bill 29, the Miscellaneous Statutes (Housing Priority Initiatives) Amendment Act, 2016, which came into force on August 2, 2016 contained specific amendments to the City of Vancouver Charter to enable the City of Vancouver to impose the municipal vacancy tax. It remains to be seen whether a successful legal challenge will be mounted but the decision of the review panel should not be considered final.
DMCL is Here to Help
At DMCL, we are ready and able to help with a review of the likelihood of success of an appeal. We can also assist with the drafting of the appeal notice and act as your agent in discussions with the City of Vancouver. If you are subject to the EHT we are also available to assist you with evaluating various planning opportunities to mitigate any EHT exposure for future years. If you have any questions about the EHT, or any other tax questions, contact Lori Oliver or your trusted DMCL advisor.