Editorial: Empty home tax empty-headed

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Vancouver Mayor Gregor Robertson’s proposal to punish homeowners who allow their properties to sit empty is an attack on the sanctity of private property rights. His threat to forge ahead if the B.C. government fails to fall into lockstep by Aug. 1 is alarming to say the least.

Robertson is proposing what he calls a “business tax” on vacant homes in order to encourage people to rent them to tenants. But owning a home, whether or not it is occupied, is not a business, and the notion of a separate property class “Residential Vacant” subject to higher rates of taxation smacks of discrimination.

Will an elderly widow who has a separately metered suite in her home be forced to rent it to strangers or face higher taxes? Will owners of condos with rental restrictions (estimated at 15 per cent of all condos) have to sell or occupy them full-time? Or will those restrictions be declared illegal and removed? Does anyone really believe that 10,800 units will become available if new taxes are imposed on these apparently vacant properties?

Consider the bureaucracy necessary to administer such a tax. Unless owners voluntarily acknowledge that their property is vacant, the city would have to monitor thousands of housing units to determine occupancy. Administering it through B.C. Assessment would be even more cumbersome and expensive.

The deadweight cost of taxation would likely eliminate any meagre revenue the extra levy on vacant homes would raise. It would be an administrative nightmare with no upside.

Moreover, the report by Egotagious Inc. that the city commissioned in support of its proposal demonstrated that establishing occupancy is not an exact science. It relied on electricity consumption data provided by BC Hydro. Non-occupancy, as the report called it, is housing that is not occupied for at least 25 days in a month during each of the four non-heating months. That would capture anyone who had the temerity to be away for the summer.

While Robertson and his Vision team erode the foundation of private property, developers anxious to build rental accommodation are being delayed by city bureaucrats for as long as two to three years to obtain necessary permitting.

The province has the authority to reject Robertson’s plan to create a “Residential Vacant” property class. But it should also stand up to Vancouver’s bluster about going it alone. Meanwhile, the city should prepare for court challenges in the event this prejudicial tax is passed.