Vancouver property owners with vacant homes may have to pay more taxes.
City hall is looking at the likelihood of increasing the empty homes tax.
The tax is currently one percent of the property’s assessed value.
According to a city staff report to council, the present rate may be low.
“Given the number of property owners that chose to pay the tax instead of renting their property, it is possible that the current tax rate is not enough of an incentive to rent,” the report notes.
In last year’s election campaign, now Vancouver Mayor Kennedy Stewart promised to triple the empty homes tax.
As mayor, Stewart successfully introduced a motion in January 2019 directing staff to come up with a plan to “review and improve the fairness and effectiveness” of the levy.
“During the election, there was support for an increase in the EHT [empty homes tax] rate,” Stewart’s motion stated.
The tax was first implemented in 2017, covering 2,538 vacant homes.
The properties slapped with by the vacancy tax represent 1.3 percent of 186,043 properties in Vancouver.
A total of 5,385 homes were covered by exemptions.
According to the staff report, the current empty homes tax rate of one percent “aimed to create a balance between providing an incentive to rent without being so high as to create a large incentive to evade the tax”.
“The rate also achieved parity with the business tax rate,” the report explains. “A property paying residential tax rates plus the EHT pays approximately the same amount of taxes as a similarly valued commercial property.”
It continues, “Prior to recommending a rate increase it is important for staff to take the time to analyze any changes that would result in a residential property subject to EHT paying higher taxes than a commercial property.”
The report also recommends a study on “different options for increasing the rate”.
These include different rates for B.C. and other Canadian residents, and foreign owners, as well as distinct rates for various categories of homes.
“Staff will report back to Council on the progress of the rate review in fall 2019 including recommendations for public consultation on the proposed options,” according to the report.