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City says it will implement empty home tax with or without the province

The City of Vancouver is giving the provincial government until Aug. 1 to signal it’s willing to collaborate on an empty home tax before the city moves forward to implement one on its own.
real estate
Photo Dan Toulgoet

The City of Vancouver is giving the provincial government until Aug. 1 to signal it’s willing to collaborate on an empty home tax before the city moves forward to implement one on its own.

Mayor Gregor Robertson made the announcement at a press conference in Coal Harbour Wednesday morning.

“Today, I’m confirming that the city will take action on taxing empty homes with or without the help of the B.C. government,” he said. “Ideally, it’s with the support of the B.C. government.”

Last year, Robertson pointed out, housing prices surged by 37 per cent while the rental vacancy rate is near zero.

A report going before council next week outlines the options for the tax.

The preferred option would see the province create and administer a new "residential vacant" property tax through B.C. Assessment. Data from the assessment roll would be used to levy the tax on empty or under-occupied properties.

The alternative would see the city establish and charge a new business tax on empty and under-occupied homes that are held as investment properties and not rented to local residents.

Robertson said the tax proceeds would go toward funding affordable housing initiatives. He noted the second option would create significant additional administration and enforcement costs for the city.

The city would also have to design a new approach in determining which homes are vacant. Robertson promised public consultation on determining how much the tax should be, although he said it would need to be high enough so there’s an incentive for people to rent their homes.

“It’s more complex to take [the second] route. Either way, Vancouver is moving forward with this empty home tax and putting thousands of empty homes on to the rental market,” he said. "And we would ensure in the process of designing this that we consult the public and all the housing stakeholders that are involved in this."

Earlier this year, a city-commissioned study by Ecotagious revealed 10,800 homes in Vancouver were left empty for more than a year in 2014.

The study measured B.C. Hydro electricity consumption data collected from 225,000 of 280,000 homes in Vancouver from 2002 to 2014. The company concluded the rate of empty homes remained consistent from 4.9 per cent in 2002 to 4.8 per cent in 2014, which is in line with rates in the rest of the Greater Vancouver Regional District.

Robertson said it’s important to get access to some of the empty homes for the sake of the rental market, which has a near zero vacancy rate.

“If we can get several thousand of those on the rental market in the near term, that’s an enormous new supply that typically takes many years to build out,” he said.

“Housing is first and foremost about homes. It’s not just a commodity to make money with and we’re going to make sure that those who treat housing as a business are treated and taxed accordingly for that use,” he added.

Robertson is writing to the provincial government to ask for support on the empty homes tax, but if he doesn’t receive a written commitment by the Aug. 1 deadline, the city will take action on its own.

“The market is skyrocketing beyond anyone’s expectations and continues to do so month by month and… rental housing is almost impossible to find in Vancouver, so we need intervention. We need action taken urgently to deal with this. I believe the province recognizes that there is a great need. It’s frustrating that there has been no action to date from either the provincial or federal government,” he said.

Robertson added he will continue to press the provincial and federal governments for a luxury and speculation tax.

Meanwhile, he said, the AirBnB issue is being studied separately and it won’t be tied to the empty homes tax at this point.

— with files from Mike Howell