Hamilton politicians have voted to ask the provincial government for permission to implement a vacant home tax.
The goal of such a tax would be to encourage owners of investment properties to occupy or rent them as a way of increasing the local housing supply, rather than leaving them vacant for extended periods.
On Wednesday, city councillors also voted not to spend any money on implementation of such a tax until they find out if the province will allow the idea to proceed.
“I would much prefer to hear from the province first before we actually build this into our budget process,” said Hamilton Mayor Fred Eisenberger.
A staff report estimates that it would cost $2.6 million to implement the tax in 2022.
The annual operating costs are estimated at $2.2 million, including hiring 16 full-time employees to administer the program. However, staff says those costs would be offset by the newly-created revenues.
“Speaking to some of those who do own those homes,” says Ward 3 Coun. Nrinder Nann, “they’re doing so to speculate on their property and make the maximum amount of profit.”
Ward 1 Coun. Maureen Wilson adds that vacant homes are a frequent source of property standards complaints, due to snow clogged sidewalks, unmoved lawns and other problems.
“There are three or four houses in the Strathcona neighbourhood that have been sitting vacant for years,” says Wilson. “They have become a cancer on the neighbourhood.”
Lou Piriano, president of the Realtor’s Association of Hamilton-Burlington, appeared before councillors to argue against the vacant home tax.
Piriano is “skeptical” it will achieve the goal of improving housing supply.
“Any such tax does not guarantee more supply,” stated Piriano, “but may simply go down as an extra cost of doing business in Hamilton, therefore discouraging economic investment.”
Vancouver introduced an empty homes tax in 2017, making it the first major city in Canada to implement such a measure that was intended to crack down on foreign investment and property speculation. The city says the tax has cut down 25 per cent of vacant properties since its launch.
Both Toronto and Ottawa introduced their own vacant home tax in 2022, while other jurisdictions like Mississauga are considering implementing similar taxes.
Comments