VANCOUVER -- A B.C. judge has quashed a City of Vancouver decision to charge $249,313 in empty homes tax to a homeowner who had claimed her $26.7 million property was exempt.

Justice Shelley Fitzpatrick's Dec. 24 ruling sends the case back to Vancouver's vacancy tax review officer to again review whether or not the Point Grey property is exempt from the tax.

At issue is whether the property qualifies for an exemption if a property is being redeveloped. The current owner of the property, Yi Ju He, bought 4749 Belmont Ave. in October 2015. The four-bedroom house had stood empty, boarded up and covered in graffiti, for many years: in 2014, the National Post reported the home had been empty since 1997.

Starting in 2016, He took steps to tear down the existing house and build a new one.

According to court documents, between January and April of 2017, He and her contractors submitted various building permits to the city, and by the last half of 2017 site work had begun on the property.

By summer of 2018, some of the permits had been issued by the City of Vancouver. But it wasn't until February and April of 2019 that the city had issued permits to demolish the existing house and build the new house.

Vancouver is the first city in Canada to levy an empty homes tax in an effort to encourage property owners to rent out properties instead of letting them sit empty. The tax applies to residential properties left empty for more than six months, and 2017 was the first year the tax came into effect.

In February 2018, He filled out an empty homes tax declaration form, and said that she should not have to pay the tax because of the city's exemption for properties that are unoccupied for more than six months because they're being renovated or redeveloped.

But the city's bylaw states that in order for this exemption to apply, permits need to have been issued.

In March 2018, the city denied He's request for an exemption, and in July, the city also denied her request for her case to be reviewed. He requested a review of that decision, and on April 24, 2019, she got word that the city's review panel had also turned down that request.

Fitzpatrick ruled that the review panel needs to go back and complete a review of He's request for an exemption. Fitzpatrick wrote that the city and He "blame the other" for permit application delays.

"Factual issues have been raised as to not only when permits were issued for the property, but when they should have been issued," Fitzpatrick wrote.

Fitzpatrick quashed the original decision of the review panel to levy the $249,313 in vacancy tax, and ordered the vacancy tax review panel to take a second look at He's application for exemption.