The provincial government made the announcement on Monday July 11th after months of heated debate regarding vacancy rates in metro Vancouver, increasing un-affordability and foreign investment.
Vancouver Mayor, Gregor Roberts, who had previously vowed to go it alone if the province did not intervene, is looking forward to getting work underway, stating previously that “Vancouver housing is first and foremost for homes, not a commodity to make money with.”
Robertson has said it is too early to say how much the Vancouver tax would be, but did say it should apply only to homes left empty 12 months of the year. “It’s not a residence, so it shouldn’t be taxed as a residence,” he said later. “It’s a business holding and should have a higher tax rate.”
Many speculate that the tax is not going to significantly affect the city’s rental market, but rather send a message that Vancouver is not totally open for just any kind of real estate transactions. Many blame foreign investors and domestic non-residents who have invested in the homes for vacation purposes or because property in Vancouver has proven to be a sound investment. Other vacancies sit un-lived in, just waiting to be sold.
According to BC’s finance minister Mike de Jaong, the legislature will re-convene on July 25th to create a direct legislative authority that will allow Vancouver to move ahead with this tax as early as 2017. The province is responsible for providing the “statutory powers” necessary within the Vancouver Charter to allow for the tax. Once legislation is passed, it will be up to the City of Vancouver to determine the tax rate and how to measure whether a home is empty or not.
For now, the rest of the province can only wait to see how this new tax will affect the city’s real estate and rental markets, and whether city’s such as Victoria or Kelowna will follow suit and press the province for the same taxation rights over vacant properties.
Richmond Mayor, Malcolm Brodie, said his city will be studying how Vancouver rolls out this complicated tax, and Victoria’s mayor, Lisa Helps, also wants to see her municipality and the rest of B.C. given the power to implement a vacant home tax.
Read the latest Information Bulletin from Bc’s ministry of Finance Here