Vancouver instituted an empty homes tax in 2017 to fight rampant speculation and foreign ownership that was leaving many domestic properties empty during the economic crisis. While not without some controversy, the tax is designed to boost the Vancouver housing market. This policy requires all homeowners to provide evidence that their homes are inhabited for at least six months each year by themselves or a tenant. If property owners and landlords do not present proof of habitation, they are subject to a 1 percent tax based on their property’s assessed value.
So, is Vancouver’s empty home tax working? And how is the Vancouver housing market doing under this new practice?
Vancouver’s Spark of Genius
It seems safe to say that the empty home tax has been a great boost to the Vancouver housing market and the local economy. Not only is the number of vacant homes shrinking but the city is also seeing increased revenue from the tax despite this fact. Vancouver looks poised to enjoy even greater prosperity in the future.
$39.4 million in revenue was collected during the 2018 tax year alone, compared to $38 million in 2017. This sum was collected from only 1,989 vacant property owners. This constitutes a 22 percent drop in vacant properties since the 2017 tax year, when there were 2,538 empty homes.
Revenue from the empty homes tax is contributed to affordable housing projects in Vancouver, such as constructing new housing and improving renters’ protections. The goal of the empty homes tax is to compel owners to put empty properties on the market, which clearly seems to be happening.
An additional 892 residential property owners were taxed after noncompliance audits were completed on 8,457 other properties, with an added $22.1 million collected. This is a major increase from audits of 2017 of 331 property owners, which yielded only $6.2 million in revenue. That audit was on only 6,231 residential properties.
Benefits to the Vancouver Housing Market
Not only does the empty home tax seem to be reducing the number of vacant properties, but the number of properties with tenants increased by 7 percent between 2017 and 2018. The number of renters went up from 46,770 to 50,102. The number of properties that were declared principal residences increased a full percentage point to 132,815, up from 131,347.
Additionally, the city reported $17 million of revenue collected in 2018 will be contributed to the Community Housing Incentive Program. This program is designed to give housing developers that provide co-op or social housing grants to help fund those projects.
The city is also planning to purchase the 24-unit SRO Ross House in Downtown Eastside for $3.8 million. The city government will also give $1.7 million to help fund various SRO housing projects. Meanwhile, $5.83 million is being set aside for renter support, such as the city’s renters advocacy and services team.