Toronto mayor John Tory says he supports a city staff report that recommends implementing a vacant home tax similar to Vancouver, which recently announced it’s tripling its levy.
Tory’s executive committee will consider the report next week and says he hopes to have the tax in place by 2022.
“We knew before the pandemic that we needed to increase the housing supply, of affordable housing in particular, but all housing supply. And ensure that the city remains a place that all members of the workforce can think about living,” he said during a news conference.
The report estimates that a 1 per cent tax of a property’s value would raise between $55 to 65 million dollars a year, which Tory says could be invested in affordable housing initiatives.
“More importantly it will encourage people not to leave homes vacant. That is the real purpose of the tax is not to have homes that are sitting vacant at a time when we have a shortage of housing in the city,” he said.
The exact number of vacant homes in the city is unknown. Enforcement would be through a voluntary declaration, and the owner can either pay the tax or put the home on the market.
Tory says he’s supported a vacant homes tax since 2017, when he raised the issue with the province.
Vancouver’s vacancy tax helped bring thousands of homes onto the rental market and Tory hopes it will have a similar effect in Toronto.
Tory says the vast majority of Toronto residents will not have to pay the tax.
“If you’re sick and have to go into the hospital or into long term care, you will not pay this tax.” he said
“Even if you go to Florida for half the year or have to have your house renovated for a period of time and it’s vacant during the renovations you will not pay this tax.”
The Toronto Regional Real Estate Board says policy decisions like this should be evidence-based.
“TRREB believes that it is important to have a clear understanding of the intended purpose and policy objective of a municipal tax on vacant homes in Toronto.” said TRREB CEO John DiMichele in a statement to Yahoo Finance Canada.
“Given the current state of the Toronto rental market, the purpose of such a tax is not immediately clear at this time. Nevertheless, TRREB looks forward to providing input on this issue as City Council deliberates on whether or not to move forward with the proposed tax.”
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.