Vancouver city council divided on proposed empty-homes tax
Matt Robinson
The Vancouver Sun
Vancouver city councillors are deeply divided along party lines on the question of whether to approve Canada’s first tax on empty homes.
After months of work by staff and outside consultants to develop the parameters of the proposed annual tax of one per cent, councillors are set to hear from residents on the final plan Wednesday, then vote.
The plan would have big financial consequences for people who have vacation or investment property in the city, but residents who only own one Vancouver home and live in it as a principal residence would pay no more taxes than they do now, regardless of whether they spend time in that home or not.
Non-Partisan Association councillors George Affleck and Melissa De Genova, who had voted in support of pursuing a tax on empty homes in June, spoke out against it Tuesday.
“I think it’s a tax grab. It’s a one-per-cent tax that I don’t think is going to work,” Affleck told reporters after a presentation on the plan by staff.
He claimed municipal taxes have gone up under Vision Vancouver rule, questioned the hefty costs to administer the levy ($4.7 million to set it up and another $1.5 million in annual expenses) and said the empty-homes levy was “significant in its impact on affordability” (and not in the direction intended by staff). Besides, he estimated, “there’s so many different ways to get out of it that it’s not going to work either.”
De Genova said she favoured the approach of using a carrot rather than “beating homeowners with a stick.” For her, that means an incentive-based program that would encourage people to rent out their empty homes.
Mayor Gregor Robertson balked at that idea, calling it “preposterous.”
“Just to be clear, for the city to give incentives, that means we either raise taxes for everybody to give an incentive, cash, to people who have second or third homes that they don’t want to rent out,” Robertson said. “I don’t know where that money would come from if it’s not coming from other taxpayers who do not have second or third homes, who are probably even challenged to own one home or rent a place.”
The sight of shuttered houses and darkened condo windows have drawn the ire of residents who struggle to find adequate housing in Vancouver, a city with a near-zero rental vacancy rate.
The city’s solution to identify then tax empty homes is based on self-declarations by owners. Every homeowner in the city would be required to disclose whether their property is a principal residence, tenanted for a combined six months a year or eligible for exemption. If not, it would be deemed vacant. At one per cent, the annual tax on an empty $1 million home would amount to $10,000.
A city-commissioned study in the spring found at least 10,800 homes had been left empty in Vancouver for a year or more, and more than 22,000 homes were empty or occupied by temporary residents on census day in May 2011.
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