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Vancouver To Tax Vacant Homes With or Without Province’s Backing

By Joannah Connolly Jun 22, 2016

Homes left vacant 12 months a year in Vancouver will soon be subject to a new form of property tax – whether or not the BC government backs the idea, Vancouver Mayor Gregor Robertson announced June 22.

A report being put forward to Council next week will recommend moving forward with an empty homes tax in partnership with the BC government, but the City is prepared to take action on its own in absence of provincial response, according to a statement on the Mayor’s website.

The statement did not specify how much the tax would be, as it first needs to iron out what kind of a tax will be implemented – and that will depend on the provincial government.

“Vancouver housing is first and foremost for homes, not a commodity to make money with,” Robertson said in the statement. “We need a tax on empty homes to encourage the best use of all our housing, and help boost our rental supply at a time when there’s almost no vacancy and a real crunch on affordability. The BC government recognizes the need for more housing supply to address affordability and they can enable the best tool to help turn thousands of empty homes into rental homes. I’ve asked for the BC government’s urgent support to tax empty homes but the City needs to take action with or without other levels of government.”

The report suggests two possible options, described as follows:

  1. The first, and preferred option, is for the BC government to create and administer a new “residential vacant” property class through BC Assessment. The City would work through the Assessment Roll to levy appropriate property taxes on empty and under-occupied investment properties, using data already collected on primary residence and rental income through the Homeowner Grant and income tax collection processes. The “residential vacant” classification would be administered annually and would likely involve a self-declaration and audit/complaint response process. 
  2. The second option is for the City to establish and charge a new business tax on empty and under-occupied homes held as investment properties and not rented to local residents, with tax proceeds going toward funding other affordable housing initiatives.

The statement added that, as the next steps, staff recommend that:

  • Mayor Robertson, on behalf of Council, write to the Premier to request the Province confirm its support to create and administer a new “residential vacant” property class so the City (and other municipalities) have the option to set a different property tax rate for empty homes; and
  • If the City does not receive a written response from the Province indicating its commitment to taking action on empty homes in partnership by August 1 2016, that Council direct staff to report back on next steps to implement a City-administered empty homes tax.

The announcement follows the publication of a City-commissioned report in March. which found that some 10,800 homes were vacant within Vancouver’s city limits. The report said that, at less than five per cent of total housing stock, this was an average vacancy rate for a city of Vancouver’s size.

However, rental vacancies are extremely tight, currently standing at 0.6 per cent in the City. Robertson told reporters outside City Hall June 22 that even if a third of those 10,800 homes could be pushed back into the rental pool because of the new tax, it would ease the rental availability crisis considerably.

Robertson added, “We’ll continue to pursue all possible options at City Hall to create opportunities for people struggling to find homes in Vancouver.”

Joannah Connolly
Joannah Connolly is editorial director of Glacier Real Estate, Glacier Media's real estate division. Joannah writes and curates real estate news for Glacier Media's local newspaper websites, including the Vancouver Courier, North Shore News, Burnaby Now, Tri-City News and others. She also oversees editorial content in Real Estate Weekly Homes, West Coast Condo, Western Investor and Glacier's special real estate publications. A dual Canadian-British citizen, Joannah has 22 years of journalism and editing experience in Vancouver and London, with a background in construction, architecture, healthcare and business media. Joannah has appeared on major local TV outlets as a real estate commentator, has moderated and spoken on various industry panels, and spent two years hosting the Real Estate Therapist radio show on Roundhouse Radio.
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