Proposed tax gets council?s support, moves to public consultation stage
MATT ROBINSON
The Vancouver Sun
Stiff fines would await those caught trying to dodge an empty homes tax in Vancouver, city staff told councillors Tuesday.
A $10,000 penalty – the maximum fine the city can issue – is the main tool staff could use to enforce the proposed annual tax on homes that are not being used as principal residences, said Kathleen Llewellyn-Thomas, the city’s general manager of community services.
“It would be our desire to make the penalties as hard as possible so that somebody would be incented to do the right thing and not declare falsely,” Llewellyn-Thomas said.
Last week Mayor Gregor Robertson plugged the annual tax on empty homes not as a way to raise cash, but as a way to boost the city’s near-zero rental vacancy rate.
The empty home tax rate is still being worked out, but it could be between one half to two per cent of a home’s assessed value, according to a recent staff report. Homeowners would be asked to self-declare whether their homes are being used as a principal residence.
Staff and the mayor have stated that the tax would bring in at least $2 million per year. When asked for the math behind that figure, city staff said their calculation assumed the owners of five per cent of the city’s empty homes would opt to pay the tax rather than rent (or try to evade). It relied on a recent study that claimed to have found 10,800 empty homes in the city, a blend of housing types with average property values of $1.9 million for single detached homes and $600,000 for condos, and a tax rate of 0.5 per cent.
Play with the variables and the estimated revenue changes. To give a sense of the range, if the owners of each of those 10,800 empty homes pay the tax rather than rent or evade, and if the tax was set at two per cent, it would be closer to $200 million per year. That figure relies on a similar blend of housing types as that used by the city in its estimate.
Robertson and city staff have stated any revenue earned above costs to administer the tax would go to affordable housing initiatives.
Coun. Heather Deal – who joined other Vision Vancouver and Green Party members in voting to support the tax and begin a fall public consultation process – had this to say to anyone who may be cooking up a tax evasion plan.
“I think that we talk about penalties here, well the benefit is, we’re going to support you in evading this tax. We’re going to support you in getting a renter in your place so you don’t pay this tax. It’s a very simple solution, actually.”
Llewellyn-Thomas said that under the proposed tax regime Vancouver homeowners would not be subject to the tax if they live in their homes full time, rent their homes full time to long-term tenants or spend a few months a year elsewhere.
Vancouver homeowners who would be hit with a tax include those who own property elsewhere and leave their homes empty, own property elsewhere but visit their home a few times a year and primarily use their property for short term rentals.
Certain homeowners who do not reside in their home as a principal residence would be able to declare exemptions, including those demolishing their homes or who only use them during the week. Absent from the list of exemptions were snowbirds who spend only six months a year in Vancouver. Staff plan to ask residents whether the tax should apply to those and other categories of homeowners.
All three Non-Partisan Association councillors have voted against the city’s plan.
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