In a city with serious housing challenges, Vancouver introduced the Empty Home Tax to start next month (January 2017) to address the shortage of rental properties. This made Vancouver the first city in Canada to impose a tax on vacant homes. The goal? To get more rental units on the market by encouraging owners not to leave their homes empty.
What Is the Empty Home Tax?
The Empty Home Tax is a 1% tax on the assessed value of properties that are empty for over six months of the year. It applies to properties that aren’t used as a principal residence or rented out long-term. The hope is to increase rental availability for residents who need it most.
This measure came in response to the public outcry over the number of vacant properties in Vancouver, especially as many residents were struggling to find affordable places to live. By targeting empty homes, the city aimed to bring more properties back into the rental market.
Impact on Property Owners
For property owners, this tax means a choice: either rent out your property or pay the 1% tax each year. For some, this led to putting their units on the rental market, increasing supply. For others who chose to keep properties vacant, the cost of the tax will quickly ad up
There are exemptions for valid reasons like major renovations or extended absences, but all homeowners need to declare their property's occupancy each year, or face fines in addition to the tax.
Effect on the Housing Market
The Empty Home Tax is part of a broader effort to improve housing affordability. While it doesn’t solve all issues, it encourages more properties to enter the rental market, helping to stabilize prices and improve rental supply.
Vancouver’s vacancy rate was about 1%, and any additional units made a difference. The tax will provide an incentive to get more homes occupied and available for rent, giving residents some relief in a tight market.
What Does This Mean for Buyers and Investors?
For buyers looking to live in Vancouver, this tax is good news. It shows the city is trying to make housing more available for those who need it. For investors, though, it means more careful consideration—holding a vacant property in Vancouver now comes with significant costs. Renting out properties or paying the tax is a choice investors must weigh.
Final Thoughts: A Step in the Right Direction
The Empty Home Tax, is a step towards addressing Vancouver’s housing challenges. While not a cure-all, it should lead to more rental units coming onto the market.
If you’re considering buying or investing in Vancouver, understanding policies like the Empty Home Tax is crucial. Whether you’re buying to live or to invest, staying informed will help you make the best decision.
What Is the Empty Home Tax?
The Empty Home Tax is a 1% tax on the assessed value of properties that are empty for over six months of the year. It applies to properties that aren’t used as a principal residence or rented out long-term. The hope is to increase rental availability for residents who need it most.
This measure came in response to the public outcry over the number of vacant properties in Vancouver, especially as many residents were struggling to find affordable places to live. By targeting empty homes, the city aimed to bring more properties back into the rental market.
Impact on Property Owners
For property owners, this tax means a choice: either rent out your property or pay the 1% tax each year. For some, this led to putting their units on the rental market, increasing supply. For others who chose to keep properties vacant, the cost of the tax will quickly ad up
There are exemptions for valid reasons like major renovations or extended absences, but all homeowners need to declare their property's occupancy each year, or face fines in addition to the tax.
Effect on the Housing Market
The Empty Home Tax is part of a broader effort to improve housing affordability. While it doesn’t solve all issues, it encourages more properties to enter the rental market, helping to stabilize prices and improve rental supply.
Vancouver’s vacancy rate was about 1%, and any additional units made a difference. The tax will provide an incentive to get more homes occupied and available for rent, giving residents some relief in a tight market.
What Does This Mean for Buyers and Investors?
For buyers looking to live in Vancouver, this tax is good news. It shows the city is trying to make housing more available for those who need it. For investors, though, it means more careful consideration—holding a vacant property in Vancouver now comes with significant costs. Renting out properties or paying the tax is a choice investors must weigh.
Final Thoughts: A Step in the Right Direction
The Empty Home Tax, is a step towards addressing Vancouver’s housing challenges. While not a cure-all, it should lead to more rental units coming onto the market.
If you’re considering buying or investing in Vancouver, understanding policies like the Empty Home Tax is crucial. Whether you’re buying to live or to invest, staying informed will help you make the best decision.
