VANCOUVER (NEWS 1130) – While we know the City of Vancouver is planning to bring in a tax on vacant homes the province is throwing its support behind it, we don’t have a clear idea on what the tax will look like.
UBC Economics Professor Joshua Gottlieb says Mayor Gregor Robertson hasn’t given many details about his plans. However, Gottlieb says he and his colleagues suggest it be based on income taxes.
“If the owner of a property pays Canadian income taxes, they declare that they’re a resident in Canada and as a result [and] pay taxes on their worldwide income in Canada, then we would say the property is not vacant. If no one is living there, then no one would be declaring residency for income tax purposes. Then, we would say it’s vacant.
He says their proposal would be easy to enforce fairly. “You would simply match up the property records with income tax records.”
Gottlieb feels the key would be to ensure things are done at an administrative level
“Once you start saying it’s a matter of occupancy, then I don’t know how you’re going to do it without saying, ‘Does this property look like it’s being occupied?’ Are we going to start penalizing people who haven’t mowed their grass recently enough because now it’s looking vacant?”
LISTEN: Joshua Gottlieb speaks to NEWS 1130 about his team’s vacant home tax proposal:
Gottlieb feels the City of Vancouver’s plan could miss some properties that are not vacant, yet also are not contributing to public goods.
“When you saw these reports a few months back of a student living in a $31-million home, well, the student probably doesn’t have a lot of income — if any — and so, was probably not paying income taxes. But the property is not vacant; someone is living in it. It just happens to be a student. So, that property would be exempt, considered ‘non-vacant’ under what I assume city hall is going to propose.”
Gottlieb suggests a 1.5 per cent additional property tax for people who aren’t reporting enough income tax or renting the property out. “That would bring the total rate for those properties up to around two per cent, which is well within the norm of property taxes that we see elsewhere in North America.”
He says the 1.5 per cent figure is a conservative number and can understand some people’s arguments for a higher tax rate.
However, he adds, “I’m also well aware that you don’t want to end up trapping people with the surcharge whose income may have fallen or whose properties may have risen in value since they purchased it.”