Vancouver Mayor Gregor Robertson has announced the city’s empty home tax will go into effect in 2017.
The tax will target secondary properties used as a business holding that could potentially be in the rental market. A principal residence by owner, tenant or licensee will not be subject to empty homes tax. It will be up to the owners to declare their principal residence to the city.
This empty homes tax will be the first in Canada and it is estimated it could generate two million dollars in revenue.
Gregor said the goal of this tax would be to bring rental vacancy rates up, not to generate revenue.
The tax rate could be between 0.5 and two per cent, based on community consultation.
The plan will be presented to city council next week.
In June it was reported Vancouver has a rental vacancy of 0.6 per cent. Adding the current vacant homes to the market will bring the vacancy rate up to three per cent, which is still on the lower end of what is considered a healthy amount for a city the size of Vancouver.
The provincial government said in June it supports a vacant homes tax in Vancouver, but the time needed to put the legislation into effect will likely take until 2018, which is at least a year later than the timeline that the City of Vancouver had proposed.
B.C. Finance Minister Mike De Jong said the city’s deadline poses “some real challenges” but the province is committed to the idea, largely in order to increase Vancouver’s rental supply.
Robertson has said numerous times in the past that he wants houses in the city to be homes, not merely investments.
“Vancouver housing is first and foremost for homes, not a commodity to make money with,” said Robertson in a release in June. “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 B.C. 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 B.C. government’s urgent support to tax empty homes but the City needs to take action with or without other levels of government.”
-With files from Jill Slattery