3 ms·

The city of Vancouver has the Empty Homes Tax. Quote from [0]: Each year, one owner of residential property in Vancouver is required to submit a property stat

The city of Vancouver has the Empty Homes Tax. Quote from [0]: Each year, one owner of residential property in Vancouver is required to submit a property status declaration to determine if their property is subject to the tax. Properties deemed empty will be subject to a tax of 1% of the property’s 2018 assessed taxable value. Most homes will not be subject to the tax, as it does not apply to principal residences or homes rented for at least six months of the year; however, all homeowners are required to submit a declaration. Net revenues from the Empty Homes Tax will be reinvested into affordable housing initiatives. End quote [0] https://vancouver.ca/home-property-development/empty-homes-tax.aspx https://vancouver.ca/home-property-development/empty-homes-t...

phamilton 8y ago
What's property tax in Vancouver? Is this essentially a doubling of property tax? (1% is a fairly common property tax amount)
- echlebek 8y ago
  Much, much less than 1%. The low tax rate has been cited as one of the reasons for housing market inflation.
- smnrchrds 8y ago
  In general, municipalities are not allowed to run a deficit in Canada. Since high taxes which would result in having a surplus are politically unpopular, usually municipalities get just enough tax to fund their programs. That is when they are writing their annual budget, they define their total expenditure E, the total assessed value of all properties within their municipality V, and set the tax rate for the year by dividing E/V [1]. Because of how inflated the values of homes in Vancouver are, V is huge. So E/V is much smaller than the rest of the country. In 2018, the tax rate for residential properties was 0.246826% [2]. A 1% surtax would more than quintuple the amount of taxes owed. [1] It's a bit more complicated than that. Residential and commercial properties have different tax rates for example. But not too much more complicated. Municipalities are not allowed to charge sales or income taxes like they do in some other countries. [2] https://vancouver.ca/home-property-development/residential.aspx https://vancouver.ca/home-property-development/residential.a...
  - hn_throwaway_99 8y ago
    Wow, thanks for this, I did not know this and now it makes much more sense as to why international investors saw Vancouver real estate as a piggy bank. In Texas many localities have property taxes of about 2.5% (though no state income tax). I wish places would do graduated property taxes - I don't know of any place that does that (with the exception of relatively meager homestead exemptions and a few "mansion taxes"). I.e. if you really want to invest in affordable housing, why not have, say, first 100k have very low tax, 100-500k a reasonable tax, etc. Many municipal water and electricity bills work this way and they work well in promoting conservation.
    - toast0 8y ago
      I like the idea, but I think you would end up with many lots getting subdivided so that more of their tax would be at lower rates. And then the small lots cause logistical issues later.
  - Taniwha 8y ago
    We do the same thing in NZ - property tax (rates) is partially made up with a user pays service component (garbage etc) and a valuation component - you pay v/V (v is your valuation, V the total valuations of all the properties in the city) of the amount the city has decided to raise. It means that if the valuation of all the properties in the city double you continue to pay the same property taxes because you pay the same percentage of the whole

phamilton 8y ago

What's property tax in Vancouver? Is this essentially a doubling of property tax? (1% is a fairly common property tax amount)

echlebek 8y ago
Much, much less than 1%. The low tax rate has been cited as one of the reasons for housing market inflation.
smnrchrds 8y ago
In general, municipalities are not allowed to run a deficit in Canada. Since high taxes which would result in having a surplus are politically unpopular, usually municipalities get just enough tax to fund their programs. That is when they are writing their annual budget, they define their total expenditure E, the total assessed value of all properties within their municipality V, and set the tax rate for the year by dividing E/V [1]. Because of how inflated the values of homes in Vancouver are, V is huge. So E/V is much smaller than the rest of the country. In 2018, the tax rate for residential properties was 0.246826% [2]. A 1% surtax would more than quintuple the amount of taxes owed. [1] It's a bit more complicated than that. Residential and commercial properties have different tax rates for example. But not too much more complicated. Municipalities are not allowed to charge sales or income taxes like they do in some other countries. [2] https://vancouver.ca/home-property-development/residential.aspx https://vancouver.ca/home-property-development/residential.a...
- hn_throwaway_99 8y ago
  Wow, thanks for this, I did not know this and now it makes much more sense as to why international investors saw Vancouver real estate as a piggy bank. In Texas many localities have property taxes of about 2.5% (though no state income tax). I wish places would do graduated property taxes - I don't know of any place that does that (with the exception of relatively meager homestead exemptions and a few "mansion taxes"). I.e. if you really want to invest in affordable housing, why not have, say, first 100k have very low tax, 100-500k a reasonable tax, etc. Many municipal water and electricity bills work this way and they work well in promoting conservation.
  - toast0 8y ago
    I like the idea, but I think you would end up with many lots getting subdivided so that more of their tax would be at lower rates. And then the small lots cause logistical issues later.
- Taniwha 8y ago
  We do the same thing in NZ - property tax (rates) is partially made up with a user pays service component (garbage etc) and a valuation component - you pay v/V (v is your valuation, V the total valuations of all the properties in the city) of the amount the city has decided to raise. It means that if the valuation of all the properties in the city double you continue to pay the same property taxes because you pay the same percentage of the whole