MORTGAGE Blog & ARTICLES
Vancouver Edges Closer to Tax on Vacant Homes
Taxing of vacant homes owners is a hot topic in the Vancouver especially that the civic election is fast approaching. Mayoralty candidates are expressing their ideas on the current significant issue in the city.
Indeed, buying and renting a home in Vancouver is very unaffordable. Most of the city’s empty homes are owned as investments which are rarely used resulting to the high rental rates on decent apartments. After purchased, most condos and homes are being emptied by the owners for years.
For this reason, mayoral candidate Meena Wong of the COPE party list proposed to put a tax on vacant homes. Wong saw the negative effect of high number of vacant units in the city. Wong was originally from Hong Kong and just moved to Vancouver 34 years ago. She may be the underdog in the upcoming civic election in November 2014, but her ideas caught the attention of the public including other political parties. According to Wong, the tax that will be generated from the vacant housing units will be allocated into affordable housing projects. How the tax will be enforced remains to be a big question.
Currently, other mayoral candidates have considered the idea but they look forward for a clearer proposal on the scenario. Mayoral candidate Kirk LaPointe of the Non-Partisan Association expresses his support on the idea. He believed that more research will help to assess the long-term implication of the issue especially in the estate market.
Obviously, as the civic election approaches, political parties are looking for solutions on how to deal with this hot issues concerning affordable housing , property rights, and foreign ownership.
The Vancouver Council directed the city’s housing agency to gather data on the total number of vacant homes and condos in the area to determine the exact figure. The local government is starting to gather the needed information so that they can come up with a solution. They believed that it is not a good practice if useful homes are not available to people. The city will also tackle when it is acceptable for homeowner to have a vacant unit.
Considering the proposed idea on rendering fees for vacant property will discourage outside investors from using the city as their investment incentive for their own benefit. The Vancouver is taking a bold step to give more priority to its local investors. Probably, it is about time that the city government will sold condos to the local buyers and not on outside investors so that they will not be locked out in their own city and in their own property market.
However, some market analyst does not agree on the idea. They thought that rendering tax on vacant spaces would lead to non-resident buyers to seek lower amounts for luxury homes to offset the added tax burden. In this case, there is a potential softening of property prices resulting to market collapse for the city’s investors. Definitely, it will ruin the good relationship of the city and the home developers or worst the entire real estate industry.
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