As of last weekend, Vancouver, British Columbia, is imposing a 1-percent tax on empty homes:
Vancouver city council has voted to approve a tax on empty homes, the first of its kind in Canada.
Self-reporting owners will be assessed a one per cent tax on homes that are not principal residences or aren’t rented out for at least six months of the year.
That means a $1-million home left vacant would be taxed $10,000.
Mayor Gregor Robertson thought this was a swell idea:
Robertson has said the tax is a way to combat what he called the housing crisis in Vancouver, and justified the measure as a “business tax” on owners he said were treating housing as an investment property.
Robertson has said the tax will improve Vancouver’s rental vacancy rate, which is currently around 0.6 per cent, by persuading owners of thousands of empty apartments and houses to put them up for rent.
That was last fall. With the tax going into effect on the first of July, landlords have been in Scurry Mode:
[Real-estate agent Cameron] Fazli said many of the people he has talked to are thinking of renting or selling their properties. He recently met with a woman who owns three empty properties in Vancouver — and says one of them is now listed for rent, another will be listed shortly and she is thinking of selling the third.
“This is a scenario of someone who is kind of in a panic now and needs to rent them out,” he said.
Other property owners are still figuring out exactly how much of the year they spend in the property, Fazli said, and are seeing if they can find a family member to occupy enough to make it over the six month threshold.
The agent predicts that there will be more available properties, but not necessarily affordable properties:
Fazli said while it will lead to more housing being available because of lower vacancy rates, it won’t drive down prices.
“It’s going to bring more rental properties onto the market but, on the affordable aspect, I think we’re going to see the properties being more on the higher end side,” he said.
Which means likely no change to Vancouver’s status as the third most unaffordable housing market on the planet:
Vancouver ranks 3rd in the 2017 Demographia International Housing Affordability Survey [pdf], down one spot from 2016 when it was second.
The survey compares 406 metropolitan housing markets in nine countries: Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the United Kingdom and the United States.
It’s the 13th edition of the report, which links median house prices to median household incomes otherwise known as the “median multiple.”
A value 3.0 or under is deemed affordable. Vancouver’s median multiple is 11.8.
At the very top of the scale is Hong Kong, which posted a score of 18.1. Should anyone care, Oklahoma City rates a 2.9.