Unprecedented 0.6 per cent rental vacancy rate means only approximately 330 purpose built rental apartments available at any given time
A report coming to Council next week outlines the next steps for the City of Vancouver to implement a tax on empty homes, at a time when Vancouver faces unprecedented low rental vacancy (0.6%), and rapidly rising housing costs. The report recommends moving forward with an empty homes tax in partnership with the BC government, but the City is prepared to take action on its own in absence of provincial response.
“Vancouver housing is first and foremost for homes, not a commodity to make money with,” says Mayor Gregor Robertson. “We need a tax on empty homes to encourage the best use of all our housing, and help boost our rental supply at a time when there’s almost no vacancy and a real crunch on affordability. The BC government recognizes the need for more housing supply to address affordability and they can enable the best tool to help turn thousands of empty homes into rental homes. I’ve asked for the BC government’s urgent support to tax empty homes but the City needs to take action with or without other levels of government.
“We’ll continue to pursue all possible options at City Hall to create opportunities for people struggling to find homes in Vancouver.”
Following consultations this spring with a number of real estate and housing experts, staff have identified two approaches to implementing an empty homes tax:
- The first, and preferred option, is for the BC government to create and administer a new ‘residential vacant’ property class through BC Assessment. The City would work through the Assessment Roll to levy appropriate property taxes on empty and under-occupied investment properties, using data already collected on primary residence and rental income through the Homeowner Grant and income tax collection processes. The ‘residential vacant’ classification would be administered annually and would likely involve a self-declaration and audit/complaint response process.
- The second option is for the City to establish and charge a new business tax on empty and under-occupied homes held as investment properties and not rented to local residents, with tax proceeds going toward funding other affordable housing initiatives. This option would require the creation of a new business tax by-law under Section 279AA-287 of the Vancouver Charter and will involve additional cost, administration and enforcement from the City.
As next steps, staff recommend that:
- Mayor Robertson, on behalf of Council, write to the Premier to request the Province confirm its support to create and administer a new “residential vacant” property class so the City (and other municipalities) have the option to set a different property tax rate for empty homes; and
- If the City does not receive a written response from the Province indicating its commitment to taking action on empty homes in partnership by August 1st 2016, that Council direct staff to report back on next steps to implement a City-administered empty homes tax.
A May 2016 survey through the City’s Talk Housing platform - with over 15,000 respondents - found that 91% of residents agreed that the number of empty homes in Vancouver is a problem, and 88% agreed that the City should advocate for senior government action to reduce the number of empty homes in Vancouver.
Read the Council report here.