A proposal to tax homes in Vancouver that are sitting empty is on the table in a bid to address the housing supply and affordability issues in the region.
As reported by CBC News, a group of UBC economic professors suggested increasing the property tax by 1.5 percent for vacant homes in Vancouver. They believe that with this, homeowners will be encouraged to rent out their houses that they barely use because they will be exempted from the surtax by doing so. Consequently, it will boost the housing stock as more properties will be made available for rent.
Josh Gottlieb, an economics professor at UBC and one of the proponents of the proposal, said that because property tax in the region is lower than the rest of Canada, it has been an attractive place for investors who acquire properties and leave them empty while their value appreciates.
But as the country is experiencing a supply issue, there needs something to be done. Gottlieb said, "The way to ultimately deal with that problem would be to expand housing supply. What do vacant units do? They do the opposite - they effectively restrict housing supply."
The report said there are 11,000 homes sitting empty in Vancouver and it would really help the country if people are encouraged to list their second homes for rent. The proposal also said that the surtax will generate an additional $90 million.
As previously reported here on Realty Today, house selling in the region reached another record high in February. The sector saw a 36.3 percent increase in house units sold last month compared to the same period in 2015. With the tight conditions between housing supply and demand, house prices in Vancouver have been increasing. The region's home property is a hot market, but experts have warned that it may soon become overheated, and owning a home in the area might turn to be "dangerously unaffordable."