The reaction to the province’s decision to impose a tax on vacant homes in B.C.’s hot housing markets has created a tale of two cities within the Capital Region.
Letters are being sent out to homeowners across Greater Victoria, giving them opportunity to seek exemption from the speculation and vacancy tax. Owners who don’t use the home as a principal residence or rent it out at least six months of the year will be required to pay the tax, set at 0.5 per cent of a home’s assessed value (meaning a $1 million home carry a $5,000 tax for an absentee owner).
The provincial government says the tax is a key measure to tackle the housing crises in B.C. urban centres where prices and rents have stretched out of the reach of many residents.
The idea has been embraced in the City of Victoria, where Couns. Ben Isitt and Jeremy Loveday are seeking provincial approval to introduce a surtax on vacant residential buildings within the city.
Victoria Mayor Lisa Helps noted that there were over 26 vacant or abandoned buildings that the city knew of, but had no authority to touch.
“If we had this we would have the authority to go around to every boarded up building that is a blight and tax it or do some kind of mechanism to have it back in productive use,” Helps said.
It’s an approach in stark contrast to one adopted across town in Langford, where Mayor Stew Young vows to continue the fight against the speculation tax. Young sees the tax as a job killer. He says his community relies on the building industry and the introduction of the speculation tax has resulted in a slowdown in projects and investment.
Greater Victoria is seeing a boom in construction activity, with many of the projects focused on residential rental properties. It seems counterintuitive that there would be a huge demand from developers interested in properties that would remain vacant for most of the year.
There still may be some willing to invest millions in the expectation that the real estate market will continue to soar forever skyward. However, government’s priority shouldn’t be to ensure that speculators will always be able to line their pocket’s at a community’s expense. A community is more than simply a collection of homes, and vacant housing does nothing to increase the value of the communities we choose to call home.