Vacancy Taxes, Do we still need them?

 BC has two homes taxes that affect rental housing. The City of Vancouver has the Empty homes tax and the Province of BC has the Speculation Tax which has a similar effect for a majority of the Province.  

Both taxes are designed to encourage people to not have their property vacant and have it used for housing either by a home owner or by a tenant. Current market conditions are having a significant effect on the rental market and vacancy rates. Rental rates are declining, while vacancy rates increase, due to the current supply of product exceeding demand. It is taking longer to find a quality tenant due to choices available to tenants. They are not in a rush to select a place. This could lead to your property being vacant past the time limit that the Speculation or Empty homes taxes become effective. Failure to have your property occupied could lead to these taxes being applied to your property. 

This begs the question: are these taxes still needed? Maybe it is time for the City of Vancouver to consider removing the empty homes tax and the Province to reduce and or remove the Speculation Tax. The speculation tax is not applied to all areas of the Province at this time. This will only occur if the people make this a priority for the government to remove. The federal government also introduced the underused housing tax in 2024. 

With all of these taxes and the current rental market supply and demand is going to push more products to the sales market which will push sales prices of homes down as well. This is what the government would like to see which is why we don’t think there will be any discussion to remove these taxes. The sales market has slowed and products are staying on the market longer than in the past few years. We anticipate the next two years will have the rental market on a downward decline in prices.            

Need help managing your investment properties. Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com