IM-Mintz_2024_0307.pub

In Vancouver it’s called the “empty home tax.” In Toronto it’s the “vacant home tax.” Whatever the name, taxing residential property that is not occupied for a government-prescribed minimum number of days each year is pernicious. [...] A foreign commuter working part-time for a Vancouver business could pay up to 6 percent – 3 to the city, 2 to the province and 1 to the federal government – $73,500 at the median house value. [...] In Vancouver the average annual capital gain on housing over the last decade was just 5.32 percent for a single home and 7.66 percent for a townhouse, which is about half the total carrying costs per year. [...] Subtract expected capital gains, the net opportunity cost for a resident holding a vacant home is $79,380 for a single home and $34,362 for a condo. [...] As for affordability, the typical vacant property released to the market is more expensive than the median home (Table C).