VANCOUVER (Reuters) - Vancouver on Wednesday proposed a 1 percent tax on vacant homes starting next year as policymakers try to cool Canada’s most expensive property market and relieve the scarcity of affordable housing.
The tax on the city’s 10,800 known empty homes and a further 10,000 homes that are not occupied long term would raise costs for foreign buyers and, the west coast Canadian city hopes, push absent homeowners to rent out their properties.
“It’s absolutely unacceptable for all that housing to be treated as a commodity first ... when housing is in such short supply,” Vancouver Mayor Gregor Robertson told a news conference.
All non-principal residences, which are unoccupied for at least six months of the year, as well as vacant residential land, are subject to the tax. The city will require an annual self-declaration on property status.
If approved by city council next week, the tax will take effect on Jan. 1.
Vancouver’s real estate market has been a hotly contested issue, with many residents and housing advocates complaining that foreign buyers, especially from China, were driving up prices and making homes unaffordable for local people.
In an effort to increase affordability, the province of British Columbia introduced a foreign property transfer tax that came into effect on Aug. 2, a move that has hit the city’s home sales.
The city of Vancouver estimates that if an additional 2,000 additional homes were made available for rent, the rental vacancy would rise to 3.5 percent from 0.6 percent.
Reporting by Catherine Ngai; Editing by Peter Cooney