Many vacant properties missed by Vancouver’s new tax

2014 mayoral candidate Meena Wong says the new tax misses many homes that are empty, and taxes some that aren't.

For the new vacant property tax, city council decided against measuring whether a property is actually empty. Photo courtesy The Canadian Press.

Imagine a home on the west side of Vancouver valued at $3 million. It's unoccupied. The owners live in the United States, but have declared the home - their only property in Canada - as a principal residence. For them, it's an investment property.

With a vacancy tax of 1%, the owner should pay $30,000 per year. But under new “empty home tax” rules, city hall will turn a blind eye to all supposed primary residences, and collect nothing.

For every 100 homes like this in Vancouver, the city is losing $3 million it could use to build real affordable housing every year.

According to the city’s recent study, over 10,000 homes are being left vacant all year round, and over 20,000 for 10 months of the year.

But city council has decided against measuring whether a property is actually empty, claiming that audits would be too difficult. Instead, they will be targeting only secondary homes, which may be inhabited.

Council is giving a few other reasons for excluding all supposed principal residences.

They point to snowbirds who live half the year south of the border. But the tax could simply be re-written to exempt homes occupied for more than 6 months of the year.

Ironically, by targeting secondary homes instead of empty ones, city hall will now end up taxing many snowbirds who spend much of their time here but have a principal home elsewhere.

The city also mentions professors who have sabbaticals overseas. But there is already a process for exemptions, and that’s a straightforward exemption.

Why is this important to me? I proposed a vacancy tax when I ran for mayor in 2014. At the time, the other parties did not support the tax. They said it wasn't possible, that the provincial government would never change the Vancouver charter to allow it.

I’m happy that they have taken almost all my ideas, and I'm even happier if people start to realize that anything is possible if we dream big, organize, and fight for it. 

But I'm worried that the program may not succeed. I don't want this to turn into yet another botched solution to our housing crisis.

Failed city initiatives like Mayor Gordon Campbell's abortive Vancouver Land Corporation in the 1990s, Gregor Robertson's tiny Rent Bank, and the unaffordable “rental 100” program, just leave the public cynical about the possibility of tackling the housing crisis. 

The NPA is already arguing that the tax is too expensive to administer and won't generate enough revenue to be worth it.

If the program is too small, and doesn't apply to enough actually empty properties, it won’t increase housing supply or bring in enough money for the city to build new affordable units.

Meanwhile, many homes will remain vacant, while some people will be taxed for homes that are lived-in. Council has heard testimonies about such cases this week.

The NPA can then point to these shortcomings and promise to cancel the program in the next election. Will support for the tax be strong enough to push back?

If we want an “empty home tax” worthy of the name, we should actually tax all the homes that are empty. If you can afford to leave it empty, you can afford to contribute to the affordable housing fund.

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