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How to protect your clients from Vancouver's Empty Homes Tax


As you know, the Empty Homes Tax or Vacancy Tax is applied to homes in Vancouver that are vacant or underutilized. As the bylaw requires a ‘registered owner’ to provide information for up to two years after a taxation year, a new owner could be responsible for a previous owner’s tax.

In January 2018, we added an exception to coverage, together with an endorsement, that provided coverage for loss relating to the Empty Homes Tax. This coverage required the purchaser to get a Statutory Declaration from the seller.

After re-evaluating both the risk and value of protection to Vancouver homeowners, we have removed this exception and corresponding endorsement as of March 17, 2018. This ensures that homeowners are truly protected and receive coverage for actual loss arising from the Empty Homes Tax. Coverage can be found under covered title risk #14 of the homeowner’s Platinum Title Insurance Policy.

We have updated our search guidelines as a reference tool for lawyers and notaries, which now includes the request for a written confirmation or Property Tax Certificate where applicable for the Vancouver Empty Homes Tax. Please click here to view the updated search guidelines.

Are your clients protected?

Consider this scenario:

A couple in Vancouver bought their first home in December 2017, with a closing date of April 30, 2018. In December, the seller declared that their home was occupied on their Empty Homes Tax Property Status Declaration. In March, the seller does not receive an EHT bill. The sale closes and the new owners live happily ever after… until November.

In November, the City of Vancouver conducts an audit on their new property and disagrees with the previous owner’s declaration. They ask the couple (registered owners) to provide proof of the sellers’ use of the property, but the sellers are nowhere to be found.

It’s now at the discretion of the city’s auditor to determine whether the new owners will be responsible for the previous owner’s tax (at 1% of the assessed value, which amounts to $10,000 on this $1,000,000 property). If the auditor deems that tax was due for 2017, it will be added to the new owner’s 2018 tax bill.

With a homeowner title insurance policy from FCT, this lucky couple is protected.

Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.


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