On January 13, 2025, following a public hearing and unanimous vote, the Vancouver City Council adopted ordinance M-4493 creating a new construction sales and use tax deferral program with the purpose of adding income-restricted housing opportunities as well as adding to the city’s long-term housing supply.

• The applicant must be the property owner of record.
• The initial program applications for both the City of Vancouver and the Department of Revenue must be submitted before receiving a building permit
• Development area must be on land where a surface parking lot has been in existence/use on or before June 9, 2022. Parking areas created after this date are ineligible.
• The parking lot must be open to public use, with or without charge.
• The site is zoned for residential or mixed-use development.
• The project must be multi-family housing, either affordable rental or owner-occupied affordable homeownership.
• A minimum of 50% of the new units in the project must be restricted to households with low or moderate-income for ten years.
• The rental units must be affordable to households with low-income (up to 80% AMI) whose monthly housing costs, including utilities other than telephone, do not exceed 30% of the household’s monthly income.
• The affordable homeownership units must be sold as owner occupancy to households with moderate-income (up to 115% AMI) whose monthly housing costs, including basic essential utilities (excluding phone and cable services), do not exceed 30% of the household’s monthly income.
• If the project is mixed use, only the bottom floor of the project can be utilized as commercial space.
• Construction must be completed (issued an occupancy permit) within three years of receiving the city certificate of conditional tax deferral. (Unless granted a one-time, two-year extension).

Complete program details and definitions may be reviewed in the approved council ordinance M-4493 or online under VMC 5.98.070

Property owners can expect to save approximately $875 for every $10,000 spent on eligible taxed goods and services. The savings rate is based upon the City’s sales tax rate and can vary in future years if tax rates change. Applicants may use the Tax Estimated Savings Calculator to help estimate the possible sales tax savings.

Examples of applicable items that a project may defer sales tax on include:

• Labor, services, and materials incorporated in the planning of the project

• Purchase of construction supplies

• Maintenance items and services

• Purchase of common-area items, such as gyms or playgrounds

• Facilities used for business use for a mixed-use development

The Department of Revenue has ultimate authority over final eligibility and sales tax savings.