Empty Homes Tax Projected to Pull in $30m
The empty homes tax has been controversial, but earlier this month, Mayor Gregor Robertson announced that the tax will generate an estimated $30 million for affordable housing in Vancouver.
Property owners who do not rent empty houses are subject to the tax, which will contribute to Vancouver’s affordable housing fund. According to Robertson, the highest payment generated was $250,000 from the tax was from one home. The median amount sits at $9,900.
Of about 183,000 residential homes in the city, only 3,300 were subject to the tax. About 5,200 empty homes were exempt for various reasons. These ranged from title transfers and redevelopments to recent owner deaths.
About 56% of the vacant homes were located in the West End. And while it’s hard to predict exactly how many homes are empty, Vancouver’s vacancy rate sits at a very modest 0.8 percent.
Many homes are still in the process of being audited. It’s very likely that the revenue is still going to increase. However, the real propose of the tax is to encourage homeowners with unused properties to put them up for rent in order to increase housing availability.
Owners had till Feb 2nd to declare whether their properties were lived in for more than half a year. Those with underused properties or who failed to declare were charged the additional tax of one percent of the assessed value of the property. Additionally, those who are late paying will face a fine of $250 plus five percent of the unpaid tax.
Implementation of the empty homes tax cost the city $7.5 million, and it will cost a further $2.5 in administration fees each year. However, the balance will be put towards affordable housing.
According to the mayor, the empty homes tax is one step towards increasing housing in the city. But only time will tell if the approach yields results.