A deadline is looming for the City of Vancouver’s new Empty Homes Tax, which council approved last November in a move to ease the rental housing crisis.
The one-per cent tax, which is the first of its kind in Canada, will apply to non-principal residences that are left empty for six months of the year or longer.
According to the city, there were more than 25,000 empty or under-occupied properties in Vancouver as of February, 2017. It’s unclear how many, if any, have since been rented out.
“It’s a tragedy. I mean we have so many families that are under-housed, in particular families and all over the west side there are empty homes,” said Caroline Adderson, a Vancouver author and creator of the ‘Vancouver Vanishes’ Facebook page.
READ MORE: City of Vancouver to provide ‘support and information’ for property owners hit with empty homes tax
Vacant homeowners who have not yet rented out their homes will need to have tenants by July 1, and ensure the properties stay occupied for the remainder of 2017 in order to avoid paying the Empty Homes Tax. But Landlord BC, which bills itself as a “one-stop resource for owning and managing rental housing in B.C.” says it has had few inquiries about renting vacant homes and its recent webinars for vacant homeowners also generated little interest.
“I don’t know whether people are procrastinating or a whole bunch of them just are simply going to pay the tax or perhaps look for other ways to perhaps not pay it, I really don’t know. This is really new territory,” said Landlord BC CEO David Hutniak.
READ MORE: City of Vancouver staff recommend 1 per cent empty homes tax
The City of Vancouver says it won’t know what will happen until February 2, 2018, which is the deadline for homeowners to self declare whether their property is vacant for the 2017 tax year.
“I think some people will indeed pay the tax. I think some people will rent their properties out. Others will sell to people who will be primary residents or landlords so that’s ways to get housing units back to the local work force and there’ll probably be some fraud as well. And it’ll be interesting to see how the city keeps up with that,” said Tom Davidoff, an economist with UBC’s Sauder School of Business.
READ MORE: Vancouver empty homes tax to go into effect in 2017
***Net revenues from the Empty Homes Tax will be reinvested into affordable housing initiatives, and at $10,000 per one million dollars in assessed value, they could add up. Global News looked at two currently vacant homes on the city’s west side – 4182 West 8th Ave. and 2855 West 38th Ave. The former was sold in March of 2016 for $6,500,000 and was assessed at $7,914,000 in July of 2016. If declared vacant, the home would generate $79,140 in Empty Homes Tax. The latter property sold for $2,081,000 in March 2014 and was most recently assessed at $3,556,400, which would equate to $35,564 in extra tax.
With some vacant homes falling into disrepair, Adderson suspects the cost to restore them to a habitable standard will not be worth it and many homeowners will instead opt to pay the tax.
“Most of them are either parking their money or they are waiting for a chance to redevelop and that’s where they’ll make their money by far it would recoup the loss of the tax,” she said.
Comments