Unit empty—punish owner
Absentee
homebuyers targeted by mayoral candidates
Vancouver
Sun
By Barbara Yaffe, columnist
15 September 2014
Mayor Gregor Robertson on Monday expressed interest in a competitor's
campaign promise to levy a tax on people who buy Vancouver homes and
leave them vacant.
"We have real concerns around empty homes, and affordability," the
Vision Vancouver leader told me.
The push for a tax on vacant housing units was introduced recently by
Meena Wong, the mayoral candidate for the Coalition of Progressive
Electors, reflecting the first time a candidate has made a campaign
pledge aimed at dampening speculation in Vancouver's increasingly
unaffordable property market.
Wong, an unsuccessful federal NDP candidate in Vancouver South in 2011
who is unlikely to win the November election, has touched a local nerve
as the need for housing grows and prices continue their upward
trajectory.
Wong would use the tax revenues generated for affordable housing.
Taxing owners for their vacant properties could become a prominent
issue in the civic election if embraced by other candidates.
That Wong herself is ethnic Chinese — she emigrated to Canada from Hong
Kong 34 years ago — will dampen any chatter about racism, or
anti-immigrant overtones.
The fact is, this city is struggling to deal with housing demand,
forcing a level of densification that neighbourhoods are starting to
resist. It makes little sense for good housing to sit empty.
As much as 25% of condos around Coal Harbour are believed to be
unoccupied.
Robertson cites a lack of reliable data on vacant properties, noting
the city's recently created Affordable Housing Agency is doing that
research, so it is "a work in progress."
"We will look at the next steps once we have that information."
Robertson noted that different governing jurisdictions would complicate
implementation. Sub-leasing is provincial, for example, and some strata
councils don't permit rentals.
Meanwhile, Non-Partisan Association candidate Kirk LaPointe says he
would want to see reliable and comprehensive data on the extent of
vacancies and the viability of enforcement measures before taking
action as mayor.
Doubtless, the tax proposal will be controversial in some quarters
because it would disrupt free market forces that characterize property
development.
And people holding real estate would frown on anything that lessens
demand or affects the value of their holdings.
Cameron Muir, the chief economist for the B.C. Real Estate Association,
turned thumbs down Wong's proposal. "The data (on vacant properties)
I've seen does not suggest this kind of approach would yield tremendous
benefit on the affordability side," said Muir, who estimates that,
across the city, perhaps seven to nine per cent of the housing stock is
vacant.
"Is this a public/social policy instrument to curb the purchase of
property for recreational use or of long-term hold property?
"Would the tax be imposed on property left vacant all the time, or just
at certain times of the year?"
Other countries
In England, the Guardian newspaper reported earlier this year that 70
per cent of housing in the central part of London is being snapped up
by foreign buyers.
Since 2012, Britain's government has allowed city and borough councils
to charge 150% of the council tax rate on homes left empty two
years or longer.
The surcharge is enforced by having councils monitor utility bills.
But many complain that the surcharge needs to be higher to dissuade
would-be owners of vacant property.
The Scottish Parliament has given similar powers to its local councils.
Hong Kong, since 2012, has imposed a 15 per cent surcharge on foreign
buyers — mainly from China — without targeting vacant properties.
Likewise, since 2010, Australia has allowed foreigners to buy only new
property. Temporary residents, upon departing the country, are required to sell
their properties.
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