Do You Own An Empty Home In Vancouver? If You Do, Prepare To Pay More In Taxes Next Year
Last month Vancouver city council unanimously approved a motion to increase the city’s Empty Homes Tax from 3.00% to 5.00% effective 2023. This means that the owner of a vacant home with a benchmark worth at $1,374,500 in April 2022 would face a yearly tax bill of $68,725 for keeping the home unoccupied.
According to Mayor Kennedy Stewart, boosting the tax is a “big blow to housing speculators.” He admits that municipal governments have limited tools when it comes to this type of issue, but says the empty homes tax is working.
The tax has been effective in reducing the number of vacant properties. According to the mayor’s office, preliminary data from the 2021 empty homes tax showed a decline in the number of vacant properties and a doubling of revenue for affordable housing initiatives. The 2020 Empty Homes Tax Annual Report showed a 26% decline in the number of vacant properties between 2017 and 2020.
In 2017, Vancouver introduced an Empty Homes Tax in an effort to alleviate the near zero vacancy rate that led to sky-high rents for the limited housing supply, and a crackdown on property speculation and foreign home ownership that left many homes empty amid the housing crisis.
The tax was charged to owners who didn’t live in their homes for at least 6 months out of the year either by themselves or renters. It was initially pegged at 1.00% of the assessed value of the home. In 2019, Council approved an increase to 1.25% and in 2021 it was raised to 3.00%.
Another motion approved by council last month was to increase the number of audits from 9,000 to 20,000 in 2023. City staff have also been directed by the mayor’s office to investigate how the tax can be used to reduce the large number of short-term rental properties.
The city has also tried to discourage homeowners from using their properties for the profitable short-term rental system through sites like VRBO and AirBNB. Homeowners who chose to do this have a system of stringent rules and regulations to abide by.
Vancouver has one of the highest home prices in North America and very limited inventory. If you are looking to buy a home, contact one of our experienced professional real estate advisors, and you can be assured that we will find you the home you are looking for