Taxing times for Vancouver’s rental housing market
Vancouver will have a tax on empty homes as early as next year and neighbours will be relied upon to help enforce it, Mayor Gregor Robertson and city staff told reporters Wednesday. The empty homes tax would be a first in Canada. It comes as residents str
1 How much is the tax?
City staff is looking at a levy of 0.5 to two per cent of the value of an empty home, according to a staff report prepared in advance of a council vote on the matter next week. With Vancouver homes selling at an average of $1.1 million apiece, a two per cent tax amounts to $22,000 or $1,835 per month.
At least $2 million in revenue would be generated from the tax annually and that would be enough to cover the costs of administering it, Mayor Gregor Robertson estimated. Any revenue earned above expenses would go to affordable housing, he said.
2 Who would pay it?
The most obvious homes that city staff wants to tax are those that sit empty year-round, year after year. But what about those that are left empty just part of the time?
It’s one of the biggest questions residents who are not in their homes for months at a time will have about the tax and it’s one that staff doesn’t have the answer to. Robertson was quick to say very few Vancouver residents would be subject to the tax, but staff plans to consult residents this fall on how far-reaching it should be.
3 Who would be exempt?
Homes regularly used as a principal residence or by tenants or family members would not be taxed. Neither would empty laneway houses or basement suites as long as at least one unit on the same parcel of land is occupied, according to the city.
Staff is also proposing exemptions for homes that are in probate or whose owner or tenant is in care and those that are subject to rental restrictions or undergoing major renovations.
4 How would the city know if a home is empty?
Homeowners would be asked to self-report the information, said Kathleen Llewellyn-Thomas, the city’s general manager of community services.
“It’s the same as the income tax process. That’s the basis of our tax system here in Canada and so the audit process and the complaints process will keep people honest.”
5 How would it be enforced?
City staff plans to rely on random audits and complaints from neighbours to make sure homeowners tell the truth. Auditors would request things like driver’s licences, health cards and documents from the Canada Revenue Agency for proof of principal residency — proof that the city can now legally demand given recent changes to the Vancouver Charter, Llewellyn-Thomas noted.