Vancouver's real estate and rental market are sky high and a group of Lower Mainland academics are convinced they might just have the remedy for it, CBC News reports.
What they have in mind is the B.C. Housing Affordability Fund which will impose 1.5% property surcharge on empty properties and residential properties that rarely get used.
Once collected, the established fund will then be redistributed to tax filers (property owners and renters) who live in the municipality where it's raised.
"We want to make living and working in British Columbia more more affordable," said assistant UBC professor Tom Davidoff . "It's going to be funded 100 per cent by a surcharge on people who own property that's either vacant or very lightly occupied."
Avoids foreign ownership issue
According to Davidoff, the fund will help ease issues surrounding foreign ownership.
"We don't think it's appropriate to tag people based on where they come from," he said. "Instead it's what you do with the house. If you live in the house and you pay income tax to British Columbia and to the federal government, that provides an exemption."
"There's nothing about your nationality or citizenship, and we think that's very important," he said.
Additionally, veterans, persons with disabilities and retirees who are recipients of CPP or OAS will be provided exemption through the fund. Exemptions will also be given for owners of rental properties in relation to their collected and reported rental revenue.
"The only way you have to pay the tax is if you own property and you choose not to rent it, or you barely occupy it and you don't pay taxes to Canada," said Davidoff. "We think that's probably a fairly small fraction of the population but it may be an awful lot of property value."
Davidoff's team estimates about $90 million that could be pulled in if the fund was currently operating in Vancouver, and this money could help set-off high residential costs when redistributed to city dwellers.
'Turn your empty place into a rental'
"We're not discouraging investment in Vancouver; in fact for people who rent out their housing - the occupant gets a cheque and the landlord doesn't pay a tax," he said. "If you're an investor, all we're saying is turn your empty place into a rental; that's all we ask."
However, the idea may not be responsive to the actual reason behind Vancouver's expensive real estate which is lack of supply, real estate guru Bob Rennie debates.
"Taxing the rich a little bit more isn't going to solve the issue of supply," Rennie told CBC. "These vacant houses are either waiting until [the owner] moves here, or until they tear it down. It probably takes a year to get a permit."
"The vacant condos in Coal Harbour are owned by people who own four or five homes around the world," he said. "I think we're looking for a sensational answer instead of getting ahead of it and looking for supply."
"We're all in Disneyland and we want to close the gates and keep the rides open," Rennie added.
