Mayor John Tory’s executive committee has given the city staff the green light to set up a vacant unit tax in the city. In an effort to help cut down on the pressure in the real estate market, Tory has proposed that a tax should be made on all vacant units and on Monday, $75,000 was given for a survey to be carried out on the tax.
Nevertheless Tory did not hesitate to mention that there are challenges involved in implementing the tax including the difficulties to determine if a home is vacant and for how long.
He went on to add that it makes very little sense to adopt a tax that cannot be implemented, so for the time being a study will be made on the tax for further improvement. If the city officials discover at the end of the study that the tax is not worth it or it will not have long-term effects on the market, then it will probably not be approved.
However, the city council will make a final decision in July as to whether the tax will be studied and if it is approved, the city staff will render a report on September 26.
In 2016, Vancouver announced a vacant home tax following the housing crisis which became very evident in the city. The tax was used to create more homes in the city by motivating homeowners to rent or sell their properties. The revenue obtained from the tax is used by the city to create affordable homes in the area.
In Vancouver, homeowners are expected to go through a yearly declaration on their homes to prove if their homes are vacant or not. If this process is not completed, the property will be considered as vacant and the owner will be liable to pay a tax.
This process however does not go down well with Tory as he explains that it is a “negative billing” alternative and it is unjust.
It is not a valid reason to consider a home vacant if a property owner is unable to make the declaration, Tory added.