Back in 2016, Vancouver city council has voted to approve a tax on empty homes introduced a 1% tax on homes that are not principal residences or aren’t rented out for at least six months of the year, in response to a large number of homes reportedly being left vacant by overseas investors.
In March 2018, the provincial government announced a modified rate structure for the speculation and vacancy tax (SVT), which is based on the value of a residential property. Specifically:
- British Columbians who own vacant homes in designated urban centres will be taxed at a rate of 0.5% on the property value.
- Canadian citizens and permanent residents who do not reside in BC will pay 0.5%.
- Foreign investors and satellite families will pay 2%.
Now, Bloomberg reports that the SVT is having a dramatic impact on Vancouver’s rental market, with formerly empty mansions now being rented out at low cost:
Isaiah Boodhoo, 22, thought it was a “complete hoax” when he saw a rental listing on Facebook for a bedroom in a Vancouver mansion for only C$1,100 ($825) a month.
It turned out the glass chandeliers, luxurious blue drapes, steam room and billiards table were for real. The nine-bedroom home, dubbed “The Castle” by the 14 students who share the property, is apparently owned by an Afghani pop artist, according to Boodhoo…
Others may also soon find themselves as lucky as more mansion owners in the city turn to renting to avoid a new tax on empty homes. In the new world of Vancouver’s housing market, where Chinese investors are decamping and low-ball offers are the norm, students can find themselves living in the lap of luxury…
With taxes on an empty Vancouver home potentially adding up to 3 percent in annual levies, homeowners are rushing to lease their homes, according to real estate agents. That’s leading to bargains in a city where the vacancy rate has been near zero percent…
For his part, Boodhoo, not only has he scored luxury digs, he’s cut his commute time to his classes in music production to about 18 minutes from two hours.
What a brilliant policy. A few years ago, Vancouver was suffering from a bonafide rental crisis, with the rental vacancy rate tracking at just 0.6%. Now there appears to be homes galore.