The City of Vancouver has announced the details of its proposed Empty Homes Tax aimed at boosting rental rates in our city’s incredibly hot market.
All non-principal residences left unoccupied for at least six months of the year will be subject to a 1% tax on the assessed value of the property, as of 2017.
In a release on Wednesday, Vancouver Mayor Gregor Robertson said the city is in a housing crisis and it’s time to take action.
“The City won’t sit on the sidelines while over 20,000 empty and under-occupied properties hold back homes for renters struggling to find an affordable and secure place to live,” said Robertson.
“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.”
The new tax is aimed at tackling affordability issues and increasing rental supply in Vancouver, where it is becoming impossible to even find a place to rent, let alone buy.
According to the City, more than 22,000 homes in Vancouver were found to be unoccupied or occupied by temporary residents on Census Day in May 2011.
Meanwhile, this year the City found 10,800 homes were not occupied, and concluded that put a strain on a housing market that’s already stretched to capacity.
The new Empty Homes Tax will also apply to vacant residential land, although there will be some exemptions on which land and homes are subject to the tax.
Properties that are rented long-term with a tenancy agreement, or for at least 30 days in a row for at least six months in aggregate over the course of a year, would be exempt.
Other exemptions include cases where:
The whole system will be self-reporting, with the City carrying out random audits to ensure compliance. And if you are caught not paying the tax, there will be penalties to pay.
Owners who fail to report before the deadline will have to pay the tax, while owners who pay late will be subject to an extra 5% tax on their property’s assessed value, with interest.
Meanwhile, anyone found to have made a false declaration to hide the fact their property is empty will face fines of up to $10,000 per day of the infraction.
The City’s plans come after notifying 220,000 homeowners, holding open houses attended by 500 residents, and receiving more than 10,000 responses to an online survey.
City staff will put the proposal to Council on Tuesday, and if approved, the Empty Homes Tax will come into force on January 1, 2017.