Kennedy Stewart made several promises when he ran for mayor of Vancouver in 2018.
One of them is to increase the tax on empty homes.
Stewart pledged to triple the empty homes tax or EHT, which is currently one percent of a property’s assessed value.
He stated this in his election platform: “Homes need to be used for housing people, not sitting empty as speculative investments.”
As mayor, he successfully filed a motion aimed at “improving the effectiveness of the empty homes tax”.
“During the election, there was support for an increase in the EHT rate,” Stewart’s motion read.
In a report to council responding to this motion, city staff noted that it is “possible that the current tax rate is not enough of an incentive to rent”.
There’s a new report to council regarding the tax, and administrators are not suggesting an increase.
The report is included in the agenda of council on Tuesday (November 26).
“Housing policy and tax experts observed that based on data to date, the EHT at the current rate of 1% appears to be performing in line with its stated policy objectives,” the document notes.
According to the report, experts also “strongly cautioned that an increase in EHT rate at this stage would likely increase the potential for noncompliance and evasion, particularly for properties that are also paying the new Provincial Speculation Tax”.
The said provincial tax is aimed at foreign and Canadian property owners in B.C., but who do not pay their taxes in the province, as well as British Columbians who own multiple properties.
“There was a suggestion that before increasing the tax rate, staff should consider opportunities to enhance compliance with the tax, potentially in collaboration with the Province,” the city staff report states.
The annual EHT started in 2017. The tax was adopted to get empty or under-utilized properties into the rental market.
For tax year 2017, a total of 2,538 homes were deemed vacant.
For 2018, there were fewer vacant homes numbering 1,989.
In a media release Wednesday (November 20), Stewart thanked people keeping empty homes.
“For those who choose to keep their properties unoccupied, we appreciate their contributions to the funds that are supporting various, much-needed affordable housing initiatives across the city,” Stewart said.
The news release noted that the city has collected $39.7 million in net revenue from the tax to “fund affordable housing initiatives”.