By Nicole Mordant
VANCOUVER, June 22 (Reuters) - Vancouver will find a way to
tax its vacant homes, possibly by treating them as business
investments, in order to ease the Canadian city's housing
affordability crisis, Mayor Gregor Robertson said on Wednesday.
If implemented, the tax could drive up costs for many
foreign investors who have helped make the west coast city
Canada's most expensive property market.
Robertson said the city will give the British Columbia
government until Aug. 1 to respond to its plan to tax nearly
11,000 empty homes in Vancouver, or go it alone.
If Vancouver fails to win provincial backing, Robertson
said, the city would begin drafting its own regulations to
create a business tax on empty homes that are held as
investments.
"We are going to make sure that those who treat housing as a
business are treated and taxed accordingly for that use,"
Robertson told reporters.
A tax rate has not yet been decided, but it needs to be high
enough that there is an incentive for owners to rent their
homes, Robertson said, adding that vacancy rates in Vancouver
are close to zero.
Robertson said the city's preferred option is to work with
the province, which already has data on whether properties are
vacant. If it goes it alone, the city would also have to enact a
new business tax by-law, something that could take time and be
expensive to administer and enforce.
In a tweet, British Columbia Premier Christy Clark said the
province was reviewing the city's report and would respond
quickly.
A spokesman for the provincial finance ministry, Jamie
Edwardson, said last week that the province was studying a
number of different proposals to cool off the red-hot housing
market.
More than 90 percent of detached homes in Vancouver are now
worth more than C$1 million ($780,000), compared with just 19
percent a decade ago, a study released last week found.
In the Greater Vancouver region, home prices have risen 46.9
percent in the last five years. Despite this stratospheric rise,
the province has been hesitant to intervene, only recently
taking small steps to start tracking foreign buyers and to slow
aggressive flipping activity.
($1 = 1.2797 Canadian dollars)