Standard Forms Spotlight: Using BCREA Clauses to Address Vancouver’s Empty Homes Tax

Jul 30, 2020

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Syntyche Smith
Project Coordinator

The City of Vancouver's Empty Homes Tax levies a tax against certain residential properties within the City of Vancouver based on how they are used. If an owner fails to make proper declarations or pay the proper tax, a lien can be issued against the property.

When it comes to a real estate transaction, buyers should be concerned that the seller has made all proper declarations and paid all amounts owing. In some cases, a buyer may require certain security or comfort from the seller to ensure this has happened. The buyer may also require additional information about the Empty Homes Tax status of the property, including the status of an appeal or an audit or whether the property (and its use) qualified for an exemption at a particular time.


The City of Vancouver's Empty Homes Tax is separate from the Speculation and Vacancy Tax (SVT). For more information regarding the SVT, please refer to the related BCREA publications or to the BC Government webpage on the SVT.

For properties being sold in Vancouver, BCREA provides 22 clauses related to the Empty Homes Tax, to help support REALTORS® ensure that their client's interests are protected. These clauses are available on WEBForms® for use by Realtors representing clients within the City of Vancouver. These clauses will not be applicable in all situations and you should carefully consider whether they apply before including them in the Contract of Purchase and Sale.

To provide the buyer with additional security, three of these clauses include holdback provisions which reflect the tax rate of the current year. The clauses which contain holdback provisions are explored below.

  1. Empty Homes Tax - Holdback Pending Appeal to Vacancy Tax Review Officer Regarding the City's Decision

The City of Vancouver has determined that the Property is subject to the Empty Homes Tax ("EHT"). The Seller has submitted a complaint to the Vacancy Tax Review Officer regarding the City of Vancouver's decision to impose the EHT on the basis that an error or omission was made by the City of Vancouver, or by the owner in completing the Property Status Declaration ("PSD"). The Buyer and Seller agree that the Buyer's conveyancing lawyer or notary will hold back from the sale proceeds an amount equal to 1.25% of the 2020 assessed value (as valued by BC Assessment) until the City of Vancouver Vacancy Tax Review Officer has determined that the Property is or is not subject to the EHT for 2020. Any EHT payable will be paid from the EHT Holdback. The funds remaining in the EHT Holdback after paying the EHT will be released by the Buyer's Conveyancer to the Seller within 3 business days of the Buyer's conveyancer paying the EHT.

This clause is used if there is a pending appeal to the Review Officer regarding whether or not the empty homes tax is payable and/or the amount payable in respect of the property. Following the appeal decision, an amount on account of the empty homes tax for a period prior to the buyer's ownership of the property may be payable. This clause provides for a holdback from the amount payable to the seller by the buyer at closing that is held in trust and from which payment of the tax owing (if any) will be made. All excess amounts above what is owing are then paid to the seller.

The percentage inserted should be the proper percentage for the applicable tax year that the appeal covers.

If there are pending appeals for more than one year, the clause should be inserted for each tax year under appeal, with the appropriate tax rate and tax year for each appeal.

  1. Empty Homes Tax - Holdback Pending Appeal to Vacancy Tax Review Panel Regarding the City's Decision

The City of Vancouver and the City of Vancouver's Vacancy Tax Review Officer have determined that the Property is subject to the Empty Homes Tax ("EHT"). The Seller has submitted an appeal to the Vacancy Tax Review Panel regarding the City of Vancouver's decision. The Buyer and Seller agree that the Buyer's conveyancing lawyer or notary will hold back from the sale proceeds an amount equal to 1.25% of the assessed value (as valued by BC Assessment) until the City of Vancouver Vacancy Tax Review Panel has determined that the Property is or is not subject to the EHT for 2020. Any EHT payable will be paid from the EHT Holdback. The funds remaining in the EHT Holdback after paying the EHT will be released by the Buyer's Conveyancer to the Seller within 3 business days of the Buyer's conveyancer paying the EHT.

This clause is used if there is a pending appeal of the Review Officer's decision to the Review Panel regarding whether or not empty homes tax is payable and/or the amount payable in respect of the property. Following the appeal decision an amount on account of the empty homes tax for a period prior to the buyer's ownership of the property may be payable. This clause provides for a holdback from the amount payable to the seller by the buyer at closing that is held in trust and from which payment of the tax owing (if any) will be made. All excess amounts above what is owing are then paid to the seller.

The percentage inserted should be the proper percentage for the applicable tax year in which the appeal covers.

If there are pending appeals for more than one year, the clause should be inserted for each tax year under appeal, with the appropriate tax rate and tax year for each appeal.

  1. Empty Homes Tax - Holdback Pending Determination if Property Subject to EHT

The Buyer and Seller agree that the Buyer's conveyancing lawyer or notary will hold back from the sale proceeds an amount equal to 1.25% of the 2020 assessed value (as valued by BC Assessment) until the City of Vancouver has determined that the Property is or is not subject to the Empty Homes Tax ("EHT") for 2020. Any EHT payable will be paid from the EHT Holdback. The funds remaining in the EHT Holdback after paying the EHT will be released by the Buyer's Conveyancer to the Seller within 3 business days of the Buyer's conveyancer paying the EHT.

This clause is used when the parties are not certain if the Property is subject to the EHT for a particular tax year for which the seller (or a previous owner) ought to have paid the empty homes tax. This clause provides for a holdback from the amount payable to the seller by the buyer at closing to be held in trust and from which payment of any tax owing would be made (if the City of Vancouver determines the property is subject to the EHT for the relevant tax year). All excess amounts above what is owing are then paid to the seller.

The percentage inserted should be the proper percentage for the applicable tax year in question.

If there is uncertainty for more than one tax year, the clause should be inserted for each tax year that the parties do not know whether the property is subject to EHT.

More Information

If you require additional information on the City of Vancouver's Empty Homes Tax and its applicability to a given property please contact your managing broker. You may also wish to advise your client to obtain professional advice from a lawyer or accountant and/or to contact the City of Vancouver.

As you can see, clauses can be very helpful in managing the risks associated with a real estate transaction by ensuring that information is conveyed and documented. As with all terms and clauses, remember that they may not be applicable in all situations and require careful consideration. To see a complete list of BCREA Clauses, access the Clause Catalogue here (REALTOR Link® username and password required).

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