Three uncompleted luxury suites atop the former Trump Tower should be exempt from Vancouver’s empty home tax of over $400,000 because they’re “bespoke” suites, the owners say in a petition to a B.C. court.
But a city tax review found the suites, which the owners said have to be custom built, weren’t developed fast enough and the properties won’t be exempt from paying the tax.
West Georgia Holdings, which owns the downtown building now called Paradox Hotel Vancouver that includes luxury hotel suites and high-end condo units, is asking the B.C. Supreme Court to order the city of Vancouver to refund the $411,500 it paid in 2019 for the 2018 tax year.
The city’s empty homes tax, which was introduced in 2017 in an effort to get empty or underutilized properties turned into long-term rental homes — was one per cent of assessed value at first and was raised to three per cent earlier this year.
There is an exemption for homes with valid building permits and those being redeveloped or undergoing major renovations “without unnecessary delay,” the city website says.
The three Paradox suites were exempted for 2017. But after an audit in 2019, the West Georgia Holdings was sent the $411,500 tax bill.
The “renovations, in the opinion of the chief building official, were not being carried out diligently and without necessary delay,” according to the petition.
The owners challenged the audit, providing a copy of the $1 million design contract from 2016 and 2017 and a timeline for the “extensive work” on architecture, design, lighting design, structural and mechanical engineering and elevators and the hiring of drywall, plumbing, tiling and stone and kitchen cabinet contractors.
The owners said they had the building permit issued in 2008, which had been extended several times.
“It is important to consider the bespoke nature” of the design and the extra attention to detail and work that involves, the petition said.
The city’s tax review officer dismissed the complaint and said the three suites weren’t exempt from the tax for a number of reasons.
The officer noted that the rest of the building had been occupied before 2017.
“There is no reason that the three penthouse units could not have been completed” by then, too, the officer ruled.
The owners requested a judicial review because the review officer didn’t address that the work was on time and that construction of a unit elsewhere in the building the officer had used for comparison had started in 2013, years before the empty homes tax was passed.
And the city didn’t specifically identify which of the city’s internal information the review officer relied on to come to his decision and the owners couldn’t respond to it.
The owners also argued that as it took four years to complete the comparison unit, the review officer couldn’t use a shorter timeline to find that the work that began with the hiring of a design consultant at the end of 2016 was too slow on the three top-floor suites.
The owners had written confirmation from the penthouse designers that “the design of high-end custom residential units such as the penthouse units requires a level of detailing and co-ordination … that is substantially above the norm” and they included a letter that verifies the work was being done in 2018 without delay.
The appeal to the court argues there was procedural unfairness in the city panel’s decision.
CORRECTION: An earlier version of this story misidentified one of the three suites in question. The story has been updated.
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