Vancouver’s newly implemented Empty Homes Tax continues to be scrutinized by some advocates in the city who say the tax unfairly affects owners of second properties.
As of the 2017 tax year, homes in the City of Vancouver that are not used as a principal residence or rented for at least six months of the year could be subject to a tax of 1 per cent of the property’s assessed taxable value.
For owners of secondary homes — residences that are unoccupied for more than half of the year — their property will be subject to the tax, unless they meet the criteria for an exemption.
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“I think it’s unjust. There are many people in Vancouver with a primary residence that spend less time than six months in Vancouver,” Rainer Borkenhagen, lead of the Unfair Vancouver Vacant Homes Tax Coalition, tells BuzzBuzzNews.
Borkenhagen and his wife lived in Vancouver for 40 years but when their children left home they decided to downsize to a one-bedroom condo in the city. Meanwhile, they also purchased a home in Gibsons, BC, which became their primary residence four years ago.
Borkenhagen uses his property in Vancouver to visit family and friends, but does not reside in it for more than 180 days a year. According to the Empty Homes tax bylaw, Borkenhagen’s condo is considered vacant and subject to the tax.
“If it’s a secondary home, the way the bylaw is written is you have to use it for half the year for purposes of employment. And that’s discriminatory for people that are retired,” says Borkenhagen.
The retired doctor, along with other members in the coalition, acknowledge that there is a lack of affordable rental housing in the city, but Borkenhagen says the City shouldn’t “pigeonhole the solution to people like us.”
Local architect, real estate consultant and developer Michael Geller agrees with the coalition that the bylaw should be amended to exempt owners of second homes.
“These are homes that are occupied on a regular basis but less than 180 days. It is absurd to expect people to be renting out these homes because they’re lived in, they’re just not lived in all the time,” Geller tells BuzzBuzzNews.
Geller says the City should be encouraging people from around the globe to own a second home in Vancouver and contribute to its society, instead of penalizing them.
“In my mind this is now becoming a jealousy tax. In other words, it doesn’t seem right that some people have two houses when others don’t even have one,” says Geller.
UBC professor of real estate finance Tom Davidoff is in favour of the tax and says it puts a bigger burden on property ownership and a lower burden on everything else.
“I think we have ridiculously low property taxes and our income and sales taxes are higher than they should be. So, that tax system punishes people who live and work here and rewards people who own vacation homes and do Airbnb relative to the way things should be,” Davidoff tells BuzzBuzzNews.
Vancouverites have until February 2 to submit their Empty Homes Tax declaration for the 2017 tax year.