July 11 (Reuters) - British Columbia will support a plan by Vancouver, a Canadian city in the grips of a housing affordability crisis, to tax vacant homes as a way to try to increase the supply of rental accommodation, the province’s finance minister said on Monday.
Vancouver Mayor Gregor Robertson said last month the west coast city, with a rental vacancy rate close to zero, would find a way to tax its nearly 11,000 empty homes with or without the province’s backing. He had given the province until Aug. 1 to respond.
If implemented, the tax could drive up costs for many foreign investors who have helped make Vancouver Canada’s most expensive property market and drive new investments to other housing markets.
Finance minister Mike de Jong said the British Columbia government would introduce on July 25 the necessary amendments to the Vancouver Charter to allow the city to push ahead with its tax plan. The charter is a provincial statute under which the city is regulated.
“We are going to provide a clear statutory authority for the City of Vancouver to implement a vacancy tax. They won’t have to camouflage it as a business tax,” de Jong told reporters.
He was referring to a “Plan B” by the city to draft its own regulations to tax empty houses as business investments if it did not get the province’s backing to change the charter.
More than 90 percent of detached homes in Vancouver are worth more than C$1 million ($762,078.95), according to a study released last month. ($1 = 1.3122 Canadian dollars) (Reporting by Nicole Mordant in Vancouver; Editing by Chizu Nomiyama)