Vancouver slaps $10K a year tax on empty homes. $10K a day for lying about it

[Independent voter]

Here's the problem as I see it. There are a lot of rich Chinese buying property in Canada, mostly Vancouver. Why? In case things hit the fan in China they will ride out the storm in Canada. So some of the houses they buy stay empty.

Why is that a problem? There is a housing shortage in Vancouver where the common folk can no longer afford to live.







http://www.calgaryherald.com/vancouv...683/story.html

Want to keep your million-dollar luxury pad in Vancouver empty? Get ready to pay $10,000 (US$7,450) annually in extra taxes. Lie about it? That’ll be $10,000 a day in fines.

Canada’s most-expensive property market, suffering from a near-zero supply of rental homes, announced the details of a new tax aimed at prodding absentee landlords into making their properties available for lease. The empty-home tax will take effect by Jan. 1 and will be calculated at one per cent of the property’s assessed value, Vancouver Mayor Gregor Robertson told reporters at City Hall.

“Vancouver is in a rental-housing crisis,” Robertson said. “The city won’t sit on the sidelines while over 20,000 empty and under-occupied properties hold back homes from renters.”

The measure is among efforts to make housing more accessible and affordable in Vancouver, ranked the world’s third-most-livable city, and has drawn attention for its sky-high prices fomented by global money flows. Public scrutiny has focused on absentee landlords, particularly from overseas, who are accused of sitting on investment properties where windows remain dark throughout the year.

In August, the provincial government imposed a 15 per cent tax on foreign buyers, and last month the federal government tightened mortgage insurance eligibility requirements. The city of Vancouver has focused its efforts on the rental market, where vacancies can get scooped up within hours while bidding wars drive up leasing costs.

Robertson estimated that more than 10,800 homes are empty and 10,000 more are not fully used. The city expects that instituting the tax will boost the supply of homes available for lease to the point that the vacancy rate increases to about 3.5 per cent from 0.6 per cent currently.

The city will allow certain exemptions to ensure that most homeowners who are Vancouver residents, including those who spend their winters at nearby ski resorts, won’t be affected. Principal homes, as well as properties that are rented for at least six months of the year on 30-day minimum leases, won’t be taxed.

Homeowners will self-declare whether their property is a principal residence or a secondary investment. People who pay the new tax late will face a 5 per cent penalty, while those who don’t declare will automatically be taxed. Falsely declaring that a home is occupied or that it’s a principal residence could lead to a maximum fine of $10,000 a day for as long as the offense continues, according to the mayor’s office.

[Xandrigity]

That's gonna suck for all the celebrities leaving the US for Canada.

[Ayla]

Good. I shouldn't have to look 400 over my budget and bribe my landlord with an additional 300 a month to fend off 200 other applications.

My most pathetic offer was $1500 for a 1 bedroom at 800 squarefeet, nothing included. We were still beaten out by others who offered more.

Now I'm paying 1600 for 1200sq feet because my land lord is a decent human being. And because her original pick backed out and cancelled all her cheques. Can barely afford essentials but I'll take it.

[analmoose]

Good. I shouldn't have to look 400 over my budget and bribe my landlord with an additional 300 a month to fend off 200 other applications.

You don't you just have to move somewhere more reasonable.

Welcome to Canada though, where you pay 40% taxes and then keep on paying new fees and more taxes after that, on anything that isn't a basic necessity for life.

[Berengil]

Sounds good to me. Use it, or pay into the city coffers.

[Ayla]

You don't you just have to move somewhere more reasonable.

Welcome to Canada though, where you pay 40% taxes and then keep on paying new fees and more taxes after that, on anything that isn't a basic necessity for life.

Like Alberta? I'm already in Surrey, that's pretty ghetto. I'm in school right now, so it's not like I can move.

Similarly, I am only licenced to work in BC, so my schooling is useless anywhere else in Canada. I can move probably end of this year and take my designation with me.

[Canpinter]

how will this be applied to homes on the market to be sold?

[Grimbold21]

Dude, don't scare me like that. I thought Tennistroll was back

[callipygoustp]

The yearly tax amount seems pretty low. If you can afford a $1million back up house I think its a pretty safe assumption that 10k a year is meaningless to you. Doesn't seem like much of a deterrent as long as the owner is willing to be honest.

[IIamaKing]

Rent house, avoid tax, profit.

[GennGreymane]

Hub...... I thought our lord and savior, @Tennisace was back!

[Canpinter]

Rent house, avoid tax, profit.

rent home, have renters trash the place past security deposit, go through long drawn out eviction process and cut your loses.

[Mistame]

Pretty fucking stupid.

[Tyrianth]

You don't you just have to move somewhere more reasonable.

Welcome to Canada though, where you pay 40% taxes and then keep on paying new fees and more taxes after that, on anything that isn't a basic necessity for life.

lol "40%" taxes.

- - - Updated - - -

Rent house, avoid tax, profit.

That's the whole point of this legislation. The housing market in Vancouver is ridiculous expensive because demand is high, but supply is low since foreign investors are buying and leaving them empty. They're encouraging foreign investors to start renting.

[Tradewind]

It's an issue because of shit like this:

http://www.rew.ca/properties/R212229...e=vancouver-bc
http://www.rew.ca/properties/R212195...e=vancouver-bc
http://www.rew.ca/properties/R212191...e=vancouver-bc

Meanwhile for similar price in Calgary, you could live in this fuckin craziness...

http://www.royallepage.ca/en/propert...9/mlsc4065428/

The Chinese speculation into the Vancouver and Toronto housing market has driven values up by ridiculous fuckin' amounts out there. It was bad enough just by virtue of it being Vancouver and not exactly a ton of usable land to build homes on, but the speculation has vaulted values so high it's damn near impossible for any old joe schmoe and family to buy a home.

Anything to cool the market out there is more than needed. But at this point, it might be too late, so many people are going to get it up the ass on their property values.

[IIamaKing]

rent home, have renters trash the place past security deposit, go through long drawn out eviction process and cut your loses.

That is a risk while renting, yes.

[Tyrianth]

The yearly tax amount seems pretty low. If you can afford a $1million back up house I think its a pretty safe assumption that 10k a year is meaningless to you. Doesn't seem like much of a deterrent as long as the owner is willing to be honest.

These houses are bought as an investment, at some point an investment becomes "not worth it". But even if this does nothing to reduce foreign investment then it's still a nice revenue stream for the city which can be put into other uses to lower housing prices.

[Canpinter]

That is a risk while renting, yes.

most people renting only make money by building equity not by getting actual profit month to month.

[Moozart]

Like Alberta? I'm already in Surrey, that's pretty ghetto. I'm in school right now, so it's not like I can move.

Similarly, I am only licenced to work in BC, so my schooling is useless anywhere else in Canada. I can move probably end of this year and take my designation with me.

i don think "ghetto" really means what you think it means. Want to see ghetto? Come visit Zone 6 Atlanta or parts of Richmond Va

[callipygoustp]

These houses are bought as an investment, at some point an investment becomes "not worth it". But even if this does nothing to reduce foreign investment then it's still a nice revenue stream for the city which can be put into other uses to lower housing prices.

Think you quoted the wrong person.