Victoria mayor seeks power to tax empty homes

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The mayor of Victoria wants the B.C. government to give municipalities across the province what Vancouver is getting – the right to tax empty homes – as a way to help ease the housing crunch in their own communities.

Victoria Mayor Lisa Helps said she's concerned about a scenario in which investors simply buy up properties elsewhere in the province to escape Vancouver's expected tax on vacant houses.

The B.C. government has announced a special sitting of the legislature next week to give Vancouver the power to tax empty houses, but the change won't apply to other municipalities.

That disparity "creates an odd, unequal playing field that could exacerbate the problem in other municipalities at the same time as it attempts to solve the problem in Vancouver," Ms. Helps said in an interview on Thursday after council debated the issue.

"The consequence could be that people stop investing in properties to flip or hold in Vancouver because they know they're going to get taxed and they just buy properties in Victoria or Burnaby or West [Vancouver] and do the same thing, because that jurisdiction doesn't have the same taxing powers."

Council was expected to send a letter on Friday to the provincial government asking that all municipalities be allowed to set vacancy taxes. Victoria is asking the province to amend the Community Charter, a law that sets out how municipalities across British Columbia are governed. Vancouver has its own charter.

Earlier this week, the Liberal government committed to amend the Vancouver Charter when the legislature reconvenes for the special session. Finance Minister Mike de Jong said at the time that Vancouver was the only municipality to request such a tax, but that he would be open to similar proposals from other local governments.

"I am going to be optimistic. Yes, I think they'll do it," Ms. Helps said, noting the government seems intent on dealing with the lack of affordable housing in B.C. "All the proposed amendment to the Community Charter is doing is giving municipalities the option of adding another tool to their toolbox."

Victoria is facing its own housing issues with soaring house prices. The average price for a single-family home in June was $758,145 – up 15.4 per cent from the same month in 2015 – according to figures provided by the Victoria Real Estate Board. The latest data from the Teranet-National Bank house-price index shows prices for all types of homes in Victoria in June were 12 per cent higher than a year earlier – a year-over-year increase far below Vancouver but still among the highest in the country, and ahead of Toronto.

Vacancy rates are also low in B.C.'s capital city for rental options, especially with more than one bedroom.

A motion debated by council on Thursday noted that Victoria is facing a "housing crisis" that includes an unknown number of units in the city sitting empty because they are held as investments rather than housing. It also calls for staff to begin collecting data on the number of empty units in the city so council can make an "informed decision" on whether to implement a vacancy tax.

"This isn't just about Victoria," Ms. Helps said, adding her city has not yet developed specific plans on how a vacancy tax would work. "If the province only amends the Vancouver Charter, then only Vancouver has the ability to make a vacancy tax."

She described the Victoria request on the issue as the "everybody else plea," noting there is an ongoing housing crisis across British Columbia and not just in Vancouver.

A spokesperson for Mr. de Jong highlighted comments the minister made on Monday as he announced his vacancy tax plans: "It's entirely possible that another community covered by the Community Charter … may decide that they wish to follow suit," he said. "If they do, my sense is that the province would look with some sympathy. We haven't had a formal request yet, and that would involve amendment to the Community Charter."

Al Richmond, president of the Union of B.C. Municipalities, said the issue, as outlined by Victoria, has yet to be brought before his organization, which is holding its annual meeting in the B.C. capital this September.