After introducing a 20% tax on foreign buyers, the city in western Canada is continuing to tackle housing affordability
Vancouver has Canada’s most expensive housing market.
Thousands of homes in Vancouver have been declared unused and liable for a new empty homes tax as part of a government attempt to tackle skyrocketing home prices and soaring rents.
About 4.6% or 8,481 homes in the western Canadian city stood empty or underutilised for more than 180 days in 2017, according to declarations submitted to the municipality by 98.85% of homeowners.
Properties deemed empty will be subjected to a tax of 1% of their assessed value.
Vancouver has rolled out a raft of measures to cool prices and improve housing affordability in the country’s most expensive real estate market.
Empty houses, also a big issue in the UK, are only one aspect of the problem. In 2017 the provincial government of British Columbia raised its foreign buyer tax from 15% to 20% to target offshore investors blamed for pushing up prices. Toronto, Canada’s biggest city, followed suit with a 15% tax in April.
Before the foreign buyer tax, sales agents said investors in Hong Kong, China and other parts of Asia were acquiring up to 40% of Vancouver condominium projects marketed abroad, absorbing the more expensive units that domestic buyers could not afford.
Nearly 61% of the homes declared empty in Vancouver were condos, and other multi-family properties made up almost 6%, according to the city government. More than a quarter of the empty properties were in downtown Vancouver.
Property owners who did not submit a declaration and those who claimed exemptions, such as for renovations or if the owner was in hospital or long-term care, were included in the empty homes number.
“This is not insignificant considering that the rental vacancy rate is less than 1% in Vancouver,” said Robert Hogue, senior economist at Royal Bank of Canada. “This kind of data is completely new so it is difficult to put into context.”
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