Vancouver hopes 1 per cent annual tax on empty homes will ease rental crisis

Vancouver has become the first city in Canada to approve a tax on empty homes, as officials in the city scramble to address the spinoff effects of an overheated housing market that ranks as one of the world’s least affordable.

On Wednesday, Vancouver city council voted to move forward with a 1 per cent annual tax on homes that are not principal residences and which are left empty for more than six months a year.

The tax is aimed at bolstering the city’s meagre supply of rental stock. Vancouver’s rental vacancy rate currently stands at 0.6 per cent – resulting in some of the highest rents in the country – while city data suggests that more than 10,800 homes are sitting empty and another 10,000 are left vacant for long periods of time.

“Vancouver is in a rental-housing crisis,” Gregor Robertson, the mayor of Vancouver, said earlier this month as he unveiled details of the tax. “The city won’t sit on the sidelines while over 20,000 empty and under-occupied properties hold back homes from renters struggling to find an affordable and secure place to live.”

An increase of 2,000 rental properties would raise the rental vacancy rate almost sixfold to 3.5 per cent, according to estimates by the city.