Owners of empty homes face punishing tax
January 22, 2018
The City of Vancouver has mailed notices to more than180,000 city homeowners to explain Canada’s first Empty Home Tax.
“Vancouver renters are in crisis, with the rental vacancy rate hovering over zero for years,” said 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 for locals.”
It is estimated that there are 25,000 empty homes in the city.
Every Vancouver homeowner is now required to submit an annual property status declaration to determine if his or her property is subject to the Empty Homes Tax.
Homeowners who fail to declare by the due date of February 2, 2018, will have their properties deemed vacant and will be subject to the tax at a rate of 1 per cent of the property’s 2017 assessed taxable value. They will also be fined a $250 penalty for non-declaration.
With the assessed value of a Vancouver home now around $1 million, the tax penalty alone could total at least $10,000.
Principal residences or properties rented for at least six months of the year are exempt from the tax.
Michael Geller, a Vancouver architect and developer who consults on housing issues is among the skeptics.
“I suspect the Empty Homes Tax will result in some properties rented out, and others sold to owner-occupiers, or investors who will rent them out,” Geller said. “But ultimately, it will be administratively expensive and not make rental housing more affordable.”
He cited one example of a Florida owner of a $4 million Vancouver condominium who advertised but could not find a qualified tenant for the time the owner was not in Vancouver. For such an owner, the empty home tax could total $40,000.