Toronto City Council has approved an implementation plan to introduce a new tax on vacant Toronto homes starting in 2022. Ottawa City Council has asked staff to study whether such a tax would work in Ottawa.
The goal is not to increase revenue, but to increase the housing supply, by encouraging homeowners to sell or rent their unoccupied home. If they choose to continue to keep the home vacant (or boarded up), a tax is levied. This revenue can then be used to fund affordable housing projects.
Vancouver implemented the “empty homes tax” charge in 2018 and credits that tax for putting more units back on the rental market.1.25% of the assessed value of a property that is neither a principal residence nor rented out for at least six months of the year is charged. That’s on top of the property tax the owner already pays. Many feel that the percentage charged should be higher – perhaps 3% would be more appropriate.
No good reason not to raise rates on vacant homes: Professor on foreign homebuyer tax – Bloomberg interviews Thomas Davidoff, from UBC’s Centre for Urban Economics and Real Estate, discussing Ottawa’s proposal to impose a federal vacant home tax.
- Toronto’s rationale on vacant home tax
- City mulling tax on vacant homes – The City of Ottawa’s perspective (CBC, December 12, 2020)
- Vacancy taxes won’t solve Canada’s housing problems, but they can make a real difference – (Globe & Mail, Dec. 8, 2020)
Should additional large and medium-sized urban centres consider adopting a Vacant Home Tax? Should the federal government be involved?