York Region is exploring the possibility of implementing a tax that would be levied on homeowners whose properties are not occupied.
Staff will conduct a feasibility study on a vacant homes tax, which would be based on the value of the property, with any revenues used for affordable housing initiatives.
Both Newmarket Mayor John Taylor and Deputy Mayor Tom Vegh voted in favour of the Oct. 14 resolution.
“The tax really has to be punitive. It has to go beyond just a cost of doing business,” Vegh said. “People have to be able to feel that and understand they’re much better off having the home occupied.”
The tax could be a tool to help combat York Region's declared housing affordability crisis, with resale home prices increasing by 150 per cent since 2007, compared to average family income increasing by 20 per cent.
Vancouver implemented a similar tax in 2017, which has decreased vacant homes by 25 per cent and produced $61.3 million in revenue. Toronto and Ottawa are planning to introduce the tax in 2022.
The study would have to figure out a way to determine vacancy, according to a staff report. The program would cost millions to implement, but staff estimate it could generate between $15 million and $90 million depending on the vacancy rate and whether a one per cent or two per cent tax is implemented.
But Vegh said the exact number of vacant homes could be lower than expected. He said a preliminary estimate from Newmarket found about 60 possible vacant homes based on water or power usage, adding about half could prove occupied upon further research.
“Anecdotally, people will tell you there’s six on my street,” Vegh said. “It’s very difficult to prove.”
Only Markham Mayor Frank Scarpitti and Regional Councillor Jim Jones voted against the resolution. Scarpitti expressed doubts the tax would work, and wanted a full presentation beforehand, adding he prefers to use positive reinforcement methods rather than negative ones.
“I don't’ want to be the dog that’s chasing the car that eventually gets tired, and realized, ‘why was I chasing it in the first place?’” Scarpitti said. “I don’t think we really do understand how big or how small this is.”
Staff have estimated that if the council ultimately approves the tax, a bylaw could potentially be ready for the first quarter of 2023.
Taylor said the study is an appropriate step to gather all the information needed on the issue.
“I look forward to having an informed debate,” he said.
