Vancouver is ranked as one of the most livable cities in the world, but with sky-high property prices and the number of available rentals bottoming out near zero, actually living there is out of reach for many.
In a bid to goad landlords into leasing their properties, the city has slapped owners of vacant units with an additional C$10,000 ($7,450) annual tax—and there’s a further C$10,000 in daily fines for landlords who dare to lie about keeping their properties empty.
Vancouver’s new vacant property tax, formally approved Nov. 16, is expected to boost available rental properties to about 3.5% from less than 1% currently, Bloombergreports.
Announcing the tax at City Hall on Nov. 9, Vancouver Mayor Gregor Robertson told reporters, “In Vancouver’s rental housing crisis, the city won’t sit on the sidelines while over 20,000 empty and under-occupied properties hold back homes from renters.”
Robertson estimated that more than 10,800 homes are empty, and some 10,000 other properties are not fully used.
The tax, which will take effect by Jan. 1, is one of a plethora of measures aimed at making housing more affordable and accessible in the country’s most expensive property market. It follows a 15% tax on foreign buyers and a narrowing of mortgage insurance eligibility requirements.
Public ire has been directed toward absentee landlords, particularly those from overseas, who are accused of hoovering up the city’s condos as investment properties while others struggle to find homes.
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But some developers say the new tax alone won’t be enough to open up Vancouver’s shuttered rental market.
Condo marketer Bob Rennie told Canada’s Globe and Mail that creating “rental zones,” especially around transit hubs, would instead help make housing more accessible. “Freeing up vacant rental in 5,000-square-foot units in Coal Harbor isn’t a solution for anybody,” Rennie said, referring to the effects of the recent tax measure. “The solution is under $1,500 a month, and I think rental-only zoning will do that.”