The B.C. legislature is being recalled for a rare summer sitting starting July 25 to give the City of Vancouver power to impose a tax on vacant homes in response to growing concerns about housing affordability.
Finance Minister Mike de Jong called Vancouver’s plan to tax unoccupied homes a “reasonable step” to try to push more units into the tight rental market.
The government will introduce amendments to the Vancouver Charter to provide clear authority to impose such a tax without the city having to try to camouflage it as some sort of business tax, de Jong said.
“It is about trying to increase the supply of rental accommodation,” de Jong said. “That is something the province and the government take very seriously.”
Without the special legislative sitting this summer to give the city enough time to develop regulations, he said, there was a risk the new tax couldn’t take effect until 2018.
The province has not yet had any requests from other municipalities for similar taxation authority, which de Jong said would require amendments to the Community Charter that sets out the powers of municipalities other than Vancouver.
“The challenges associated with people coming here in a strong economy are not going to be solved overnight,” de Jong added. “They’re not going to be solved in any one single way. It’s going to take governments working together.”
Vancouver Mayor Gregor Robertson had threatened to go it alone if the province refused to support its taxation plan.
De Jong’s announcement Monday came after the release last week of new data from June on the level of declared investment by foreign nationals in B.C. residential real estate.
The government also wants privacy commissioner approval to share other information with Vancouver that could help the city enforce the tax, said de Jong.
It’s not yet clear how the city would deem a home unoccupied, whether electricity consumption might be used as a gauge, or what tax rate would be applied.
Robertson has said tax money raised from owners who opt to leave their units empty would be used to create new housing.
The province has so far adopted a wait-and-see response to the preliminary data on foreign buyers, deferring calls for other taxation measures to rein in rapidly rising real estate prices.
The government also intends to pass legislation to follow through on its commitment to end self-regulation of B.C.’s real estate industry.