Vancouver considers two options for vacant home tax

VANCOUVER (NEWS 1130) – We’ll do it with or without you. That is from Vancouver’s mayor who is frustrated at the lack of intervention to control the local housing market and now he’s presenting the provincial government with an ultimatum.

Gregor Robertson is putting two options for a vacancy tax on the table.

• Option 1: increase property taxes on empty homes with the help of the provincial government.
• Option 2: introduce a new business tax on empty or under occupied properties.

 

Robertson says the BC Liberals have until August 1st to respond with its commitment otherwise, he’s prepared to handle the real estate market crisis on his own.

“If we don’t get a response from the province or they are not willing to partner with us then we will have to get our city staff on it and they’ll come back to council with a work plan and a timetable to implement this.”

He adds he’s trying to get Victoria’s attention before it gets “distracted” by next May’s provincial election. “Everyone has had many months to look at this. We’ve been in a crisis for many months. It’s action time now. We just want to clear on our timelines so we can give our staff the green light to go ahead with this if we have to do it alone.”

Exactly how much the tax will be is going to be decided following consultations with both the public and stakeholders but the mayor says it will be sufficient enough to make homeowners think twice about leaving their place empty.

Robertson says staff will know if homes are empty through existing data collected by BC Hydro and BC Assessment. “The need for a luxury home sales tax and a speculation tax continues to be very urgent. The importance of the Federal Government addressing the market issues is very important.”

The rental vacancy in Vancouver is 0.6 per cent and Robertson adds there are 10,800 “empty homes” counted in the city annually.

The money from increased taxes will be used to create more rental units in the city.

Tom Davidoff with UBC’s Sauder School of Business says this would be better than nothing, but points out it’s difficult to measure what a vacant unit is.

“Because of course if you’re gonna tax me for not using utilities I’ll just use utilities which will be cheaper than paying the tax. Having neighbours report on other neighbours, I don’t quite know what the mechanism would be.”

He adds, “Vacancy is part of the problem, but we’ve got astronaut families, we’ve got vacation homes, different types of speculative investment. I think vacancy is too narrow of a tax base and too hard to define, so again, relative to no alternative, I’d support this. Relative to a broader definition of what’s driving unaffordability in this city, I think the plan could use some improvement.”

Dozens of economists including Davidoff have previously put forward a proposal, which he still thinks would be a better route.

“To tax anybody who owns property here who isn’t a landlord and isn’t now and never has been a real income tax payer.”

The City is giving the province until August 1st to respond.