Empty Homes Tax reduced Vancouver's number of vacant homes by 36%

Empty Homes Tax has reduced Vancouver's number of vacant homes by 36%

Coal Harbour in downtown Vancouver. (Shutterstock)

A new update by the City of Vancouver on the effectiveness of its municipal Empty Homes Tax (EHT) suggests it helped cut down on the number of vacant homes across the city.

After five years of the EHT being in effect, the total number of vacant properties within Vancouver has fallen to 1,398 homes or 36% fewer properties compared to 2017, when the tax regime first launched.

As of the data compiled in November 2022, of the 1,755 homes declared or deemed vacant under the EHT in 2020, 49% were converted to occupied status during the 2021 tax year. This includes 868 occupied homes, 158 exempt homes, 706 vacant homes, and 23 homes that do not require a declaration.

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The City’s report on the 2021 tax year notes that 133,422 homes were used as the principal residence, while 57,181 were tenanted as rentals.

Furthermore, between 2019 and 2021, there was an apparent trend in homes being principal residences falling in proportion, and tenanted rentals increasing slightly. In 2021, the proportion was 67.92% as principal residences and 29.11% as tenanted rentals.

When exempt and vacant properties are combined, there were a total of 5,838 homes under this classification in the 2021 tax year. Most of these properties (56%) are condominiums.

As can be expected, the downtown Vancouver peninsula had the greatest real number of exempt or vacant units, which are overwhelmingly condominiums, while neighbourhoods such as Shaughnessy and West Point Grey — where there are larger and more expensive single-family homes — also had some of the highest proportions of such classified units.

Properties that are exempt or vacant based on district/neighbourhood, 2021 tax year. (City of Vancouver)

The number of properties required to submit an EHT declaration has grown from 192,117 (101,162 condos; 80,730 single-family/duplex; 10,225 other) in 2019 to 196,441 (105,581 condos; 80,645 single-family/duplex; 10,215 other) in 2021.

City staff cites rental market data from Canada Mortgage and Housing Corporation that shows an increase of over 5,900 condominium units in the long-term rental supply within Vancouver in 2019 after the introduction of EHT and other measures like the provincial government’s separate Speculation and Vacancy Tax (SVT), which also applies to Vancouver property owners. The number of condominium homes used as rentals increased by 2,455 units in 2020 and 615 units in 2021.

The provincial government anticipates its newly approved legislation banning stratas from restricting homeowners from renting out their units will potentially add thousands of homes to the rental supply market. Through SVT data, it is estimated about 2,300 empty condominiums across BC cannot be rented due to strata rules.

To date, the City of Vancouver’s EHT has raised a total of $115 million in revenue, which is largely directed towards grants for non-profit organizations to help fund the construction of new affordable housing buildings.

In April 2022, the previous makeup of Vancouver City Council approved a hike of the EHT rate to 5% on the assessed value of a property for the 2023 tax year. This is up from the current rate of 3% for the 2021 and 2022 tax years.

When the EHT was first introduced in 2017, the rate was 1%, and its first increase in 2020 saw it grow to 1.25%.

The deadline for EHT declaration for the 2022 tax year is February 2, 2023. Late declarations are subject to a $250 fine.

The annual deadline to file the provincial government’s separate SVT declaration is March 31.

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