Canada has a first of its kind tax on vacant homes which will come into effect in 2017. The city council for the first time has accepted a 1% tax on vacant homes.
With the housing prices crisis in Canada, solutions are being sort to help improve on the supply of new properties and this is just one possible solution.
Home owners of properties which have been vacant for over six months without being occupied will be asked to pay a 1% tax.
This implies that a $1 million home that has been left empty would be taxed $10,000.
Most councilors voted in favor of the new tax including Vancouver May Gregor Robertson and all Vision Vancouver councilors.
All three representatives of the NPA however were not in favor of the motion.
The tax according to Robertson will help address Vancouver’s housing crisis and also described the tax as a “business tax” on owners who thing that owing a home is an investment property.
He went on to clarify that the tax will help increase on the supply level as more homes will be made available to buyers.
Vacant owners are expected to willingly come forward to disclose if their property had been vacant and in case of a false report, the individual will face a charge of up to $10,000.
However owners of properties that are on renovation, or owners that are hospitalized and properties with strata rental restrictions will not be affected by the tax.
Robertson also disclosed that the sole aim of the tax is not a means to generate money but instead to encourage homeowners to make available their properties as Canada hosuing market is short in home supply.
Furthermore the money acquired for the tax will goes towards making housing more affordable for Canadians.
With thousands of empty homes and apartments to be made available, buyers will be able to buy more affordable prices amid the current high housing situation