Vancouver’s precedent-setting tax on empty homes will almost triple for 2021, prompting at least one other municipality in the region, West Vancouver, to push again for a similar tax.
Vancouver city staff had recommended more study, but Mayor Kennedy Stewart encouraged council to agree to the big increase after a new federal report said the city’s and the province’s taxes on vacation homes and empty houses are the reason for a dramatic jump in the number of condos becoming available for rent in 2019.
“I just think it’s working, and the [Canada Mortgage and Housing Corp.] report confirms that,” Mr. Stewart said.
When he campaigned in 2018, Mr. Stewart promised to raise the tax from 1 per cent of a home’s assessed taxable value to 3 per cent, but then hesitated. It was increased to 1.25 per cent for 2020.
But the CMHC report, which dug deeper into 2019 data released earlier this year, makes it clear that Vancouver’s housing situation changed significantly because of the new empty-homes taxes.
The report, which was given to the mayor and The Globe and Mail Tuesday, emphasizes that almost 9,000 of the 11,000 condo units added to the region’s rental pool in 2019 were older units converted from some other use.
“The number of new units was, in many ways, normal,” said CMHC analyst Eric Bond. It was the addition of so many older units into the market that shifted the proportion of the city’s 93,000 rented condos from about 31 per cent to almost 36.5 per cent, he said.
Vancouver has collected more than $60-million with its empty-homes tax, putting the money toward subsidized-housing projects. The higher levy will mean that the owner of an empty $3-million house in Vancouver who is paying $37,500 in additional property tax this year will pay $90,000 next year.
Vancouver’s bold move has prompted West Vancouver Mayor Mary-Ann Booth to vow to renew her fight to get a similar tax for that wealthy community.
Ms. Booth said West Vancouver is even more plagued by empty homes than Vancouver or Richmond, with about 10 per cent of the city’s 17,000 homes thought to be unoccupied most of the time.
“We’re ground zero for empty homes and speculation,” she said.
Vancouver’s success has demonstrated yet again that it’s something her city should have, she said.
“This bolsters my conviction. It’s successful, there’s a model.”
But the province has so far resisted granting any other city the authority to introduce an empty-homes tax, she said, despite almost two dozen attempts on her part to get provincial approval.
Now, she said, she’s getting tired of being nice, pointing out that the province is taking millions of dollars in property-tax money out of her city that could be used for much-needed affordable housing.
She warned that, if the province won’t co-operate, her city will not be prepared to help provincial officials track down the many properties she suspects are avoiding the tax in West Vancouver.
Only 415 of the almost 1,700 empty homes in West Vancouver have paid the provincial speculation tax. It’s something regular residents desperately want to see changed, Ms. Booth said.
“My community is behind me. They’ve suffered the effects.”
Mr. Stewart’s motion faced opposition from three Non-Partisan Association councillors. One of them, Sarah Kirby-Yung, said she was concerned that more property owners would try to evade the empty-homes designation if the tax got too high.
“I’m worrying we may push the envelope too far,” she said.
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