In another bid to normalize the hot Vancouver housing market, city staff have recommended that empty homes be taxed 1 per cent of their assessed value starting January 1st, 2017.
City staff have been researching empty homes in Vancouver since February of this year, and the recommendation is the latest step toward rectifying what Mayor Gregor Robertson describes as a “rental housing crisis.” Aimed at encouraging owners of Vancouver’s 10,800 year-round empty homes and 10,000 “under-occupied” homes to rent out their properties, the tax, if passed, would apply to all non-principal residences that are unoccupied for six full months per year or more, with some exceptions. It would also apply to vacant residential land.
Punishment would be harsh for anyone attempting to circumvent the tax — for example, by falsely declaring that a property is their principal residence. The plan is for rule breakers to be fined up to $10,000, with additional fines being added each day their offence continues.
“In a rental housing crisis, it’s unacceptable for so much housing to be treated as a commodity when people are desperate for an affordable, secure place to live. Housing is for homes first, and as investments second,” says Robertson in the release.
Competition for rental housing in Vancouver is indeed fierce. The city has the second-lowest vacancy rate in the country, per the most recent CMHC data, and prices for available units are incredibly high. An October report from PadMapper places median rent for a one-bedroom apartment in Vancouver at $1,800 per month, far above $1,370 in second-place Toronto. At $2,800, median rent for two-bedroom apartment in Vancouver is even higher.
Home prices in Vancouver also remain high, despite the BC government’s introduction of a 15 per cent tax on foreign buyers in August.
Properties exempt from the 1 per cent tax would include homes undergoing major renovations, homes whose registered owner is undergoing medical or supportive care and homes whose ownership changed during the previous year. Properties that are rented out for at least 30 days in a row for a minimum of six months in aggregate over the course of the year would also not be affected. Overall, the City of Vancouver does not expect the tax to apply to most city residents.
City staff and Vancouver’s City Council will be discussing the next steps for the tax on Tuesday, November 15th. As mentioned, the suggested start date is January 1st, 2017; however, Global News points out that the BC government has said that it may take until 2018 for the legislation required to make it happen to be put in place.