Vancouver hikes empty homes tax to 5% of assessed value

Vancouver is raising the tax that prods owners of empty homes to rent their vacant properties in order to help ease the city's low vacancy rate.

Councillors have unanimously backed a motion from Mayor Kennedy Stewart to hike the empty homes tax to five per cent of a property's assessed value, effective next year.

In a social media message posted after the motion was approved late Wednesday, Stewart says boosting the tax from three per cent is a "big blow to housing speculators."

The motion also doubles the number of annual compliance audits to 20,000 and Stewart says it includes measures to improve fairness, ensuring the tax is not assessed on homes that legitimately qualify for an exemption.

The tax was introduced in 2017 as a one-per cent levy designed to return empty and underutilized properties to the market as long-term rental homes in an effort to raise the city's vacancy rate of barely one per cent, the lowest in Canada.

The tax was raised to three per cent last year and Stewart has said the increase has brought in about $32 million for affordable housing and "returned" more than 4,000 homes to locals.

Further increases are possible and Stewart has described the tax as an important step in tackling Vancouver's housing affordability crisis.

Vancouver homeowners are required to submit a declaration each year to determine if their property is subject to the assessment, but the city's website says most homes are exempt because the tax does not apply to principal residences or homes rented for at least six months of the year.