Vancouver Mayor Gregor Robertson announced the city will be moving forward with an empty homes tax in 2017.
The tax will be between 0.5 to two per cent annually based on the assessed value of the home.
He says the tax is not a silver bullet solution for Vancouver’s Real Estate crisis, but it will make an impact on bringing rentals back to the market.
The issue will come before City Council next week.
“In the coming weeks, staff will be approaching Council with a recommendation for public engagement and consultation to hear your views on a proposed Empty Homes Tax,” reads the city’s website.
City staff say the tax will raise an estimated $2 million in revenue that can be used to increase rental stock.
The province has amended the city’s Charter to allow Vancouver to levy a tax on empty homes.
The city says the main goal is to put rentals back in the market.
“Homes that are left empty could be used to help relieve low vacancy rates. We want to encourage owners of empty homes to bring them into the rental stock.”
GM Community Services says tax bill will require people to declare principle residence #VanRE
— Shelby Thom (@ShelbyThom980) September 14, 2016
Robertson says the tax is not permanent. He says the city will re-evaluate need for the tax if rental vacancy returns to healthy levels.
An empty homes report by Ecotagious earlier this year, determined that there were 10,800 vacant homes in the city.
The author of the report had said that if vacant homes in the city were put on the rental market, it would increase Vancouver’s rental rate by 10 per cent.
The empty homes tax would be the first in Canada.
The city says the majority of homes in Vancouver will not be subject to the tax.
Homes that are the principal residence of the owner or long-term tenant, or a family member will not be subject to the proposed tax.
An empty homes will be identified using self-declaration, audit, and complaint response processes.
All homeowners will be required to declare annually that the property is their main residence.
The city says there will be some exemptions, but that those will be defined through public consultation.
Revenue from the proposed tax will be applied to affordable housing initiatives.
Who will be impacted?
The proposed tax will apply to homes that are not a principal residence or are left empty for long periods of time.
But the city says some exemptions may apply, depending on public consulation, some may include:
- Owner is recently deceased and estate is in probate
- Home is undergoing major renovation with permits
- Owner is in residential care with reasonable expectation of return
- Property is undergoing change in ownership
- Property is subject to rental restrictions
- Owner or tenant uses home for the majority of the year for work or study purposes, but claims principal residence elsewhere
The city says the system will rely in self-declaration that will be enforced through an audit process.
However there is no knowledge on how that audit process would work and how many people will be assigned to the task.