A recent BC Supreme Court decision may be of significant interest to residential property owners in the City of Vancouver who have been denied vacancy tax exemptions for properties under redevelopment.
In 2016, the City of Vancouver ("City") implemented a vacancy tax on residential properties left vacant for a period of time, subject to certain exemptions, including for those properties undergoing redevelopment (the "Vacancy Tax"). The Vacancy Tax By-law, No. 11674 (the "By-law") is the legal basis for the imposition of the Vacancy Tax and outlines how it is administered. In Belmont Nominee Ltd. v. Vancouver (City)1, the Court considered the reasonableness of a vacancy tax review officer ("Review Officer") and subsequent vacancy tax review panel's ("Review Panel") decision to disallow a tax exemption under the By-law for vacant property undergoing redevelopment.
The petitioner, Belmont Nominee Ltd. ("Belmont"), purchased a bare residential property at 4769 Belmont Avenue, Vancouver (the "Property") in 2000. In April 2018, Belmont retained architects to prepare plans and submit permit applications for a new house on the Property. On August 8, 2018, the architects submitted to the City a development permit application (the "Application"), and Belmont filed a Vacancy Tax declaration in January 2019 for the 2018 tax year, claiming an exemption under s. 3.2(b)2 of the By-law due to redevelopment or renovation. The City denied the claim of exemption, stating that in order to meet the requirement that the property is vacant for more than 6 months in order to carry out redevelopment, a full and complete permit application must have been submitted before July 1, 2018. Belmont was then issued a 2018 Vacancy Tax Notice assessing a tax of $344,970. Belmont filed a request to review the City's Vacancy Tax assessment with a Review Officer and later Review Panel, both of which found the exemption did not apply, upholding the asserted July 1 deadline.
Belmont appealed the decision to enforce the asserted July 1 deadline on the grounds that the specific text of the By-law only requires that during the year, a complete Application has to be submitted on behalf of the property owner and be under review by the City and that the property is vacant for more than 6 months in order to carry out either redevelopment or initial development. There is no mention of a July 1 deadline for the exemption to apply. Belmont argued that the decisions of the Review Officer and Review Panel were unreasonable and failed to adequately interpret the language of the By-law.
The Court agreed, holding that neither the Review Officer nor the Review Panel grappled with the text, context, and purpose of the By-law in coming to their decisions, nor did they consider the overall purpose of the By-law or exemption. The Review Officer concluded, without analysis, that there needed to be an Application submitted prior to July 1, 2018, for a residential property to be considered to be vacant for more than 6 months "in order to" carry out redevelopment. The Court noted, "The Review Officer reached a result that required the exemption to be interpreted with words that [did] not appear in the By-law."3 Further, that the decisions of the Review Officer and Review Panel, "[did] not display the required internally coherent and logical chain of analysis that would allow the reviewing court to understand how they arrived at their interpretations and applications of s. 3.2(b)."4
The decisions of the Review Officer and Review Panel were quashed and the matter was remitted to a new Review Officer for determination.
1. Belmont Nominee Ltd. v. Vancouver (City), 2021 BCSC 2492 [Belmont].
2. S. 3.2(b) of the By-law states that a vacancy tax is not payable for a residential property if the residential property was unoccupied for more than six months during the vacancy reference period in order to carry out either redevelopment or initial development of residential property that is unimproved with any dwelling units, or the rehabilitation and conservation of heritage property.
3. Belmont, supra note 1 at 83.
4. Belmont, supra note 1 at 90.
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