Vancouver mayor proposes Empty Homes Tax hike, more auditing

Coal Harbour and downtown Vancouver are seen from the air in spring 2019. (Pete Cline / CTV News Vancouver)

With a municipal election on the horizon, Vancouver Mayor Kennedy Stewart has proposed another hike to the city's Empty Homes Tax.

The mayor is putting forward a motion to increase the levy to five per cent of a home's assessed value, while doubling the number of audits to catch more scofflaws filing false declarations. It's scheduled to be debated on April 26 and 27.

"I expect unanimous support from council on this important step, as we must use every tool we have in our municipal toolkit to tackle our housing affordability crisis," Stewart said in a statement Wednesday.

While the tax hasn't had a clear impact on affordability – the average rent for a Vancouver apartment increased 23 per cent over the last 12 months, according to a recent report – Stewart pointed to preliminary data indicating there has been a decline in vacant properties in the city. That suggests more space is being made available to renters.

The tax also brought in tens of millions of dollars last year, after council increased it to three per cent, up from the previous rate of 1.25 per cent.

"My move to triple the empty homes tax in 2020 is on pace to deliver more than $32 million for affordable housing while helping return more than 4,000 homes to locals," Stewart said, adding that there are still "hundreds of homes declared vacant, and thousands more empty homes claiming exemptions."

According to the mayor, there were 892 audits completed in 2019, and 5.5 per cent of them caught non-compliant homeowners.

When it comes to actual home prices, experts have predicted the interest rate hikes being implemented by the Bank of Canada this year are likely to cool the country’s red hot housing market.

“There’s a very clear correlation,” Ian Lee, associate professor at Carleton University’s Sprott School of Business, told CTV News Channel Wednesday. “Interest rates go up, real estate demand and real estate prices move down.”

Municipal elections are being held across B.C. on Oct. 15.

With files from CTVNews.ca’s Jennifer Ferreira