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.”
Reuters contributed to this report.
