Vancouver mayor Gregor Robertson eyes vacancy tax amid debate over Chinese money and offshore investors

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Mayor of Vancouver Gregor Robertson, pictured in 2013 on a visit to Hong Kong, said on Sunday that due to “unregulated, speculative global capital flowing into Metro Vancouver’s real estate, we are seeing housing prices completely disconnected from local incomes”. Three years ago, he had labelled concerns about Chinese money and its impact on Vancouver prices as “ridiculous”. Photo: SCMP Picture

Published: 5:18am, 9 Jun 2016Updated: 6:06am, 9 Jun 2016

Vancouver’s mayor Gregor Robertson says he is considering the introduction of a tax on empty homes, amid a roiling debate in the city about the role of Chinese money and offshore investors in North America’s most unaffordable real estate market.

In an interview with Bloomberg TV on Tuesday, Robertson said he was “looking at new regulation and a carrot-and-stick approach to making sure that houses aren’t empty in Vancouver,” including a tax on vacant homes. “If you’re not using your property - either living in it or renting it out - then you have to pay more tax. Because effectively it’s a business holding, and should be taxed accordingly.”

It is the latest in a series of pronouncements from Robertson about Vancouver’s real estate affordability crisis, with benchmark home prices up by 30 per cent from last May, and average detached house prices skyrocketing by about 40 per cent last year, hitting C$1.8 million. Incomes in Vancouver are among the lowest in Canada.

In Vancouver, house owners made more sitting on their assets than entire population did by actually working last year

Some economists have linked the huge spikes to an unprecedented outflow of US$450billion in private capital from China last year, which came amid fears of both a substantial devaluation of the yuan and a crackdown by Beijing on illicit cash transfers.

You can see the writing on the wall, or the writing on the ‘for sale’ sign, and you know where the demand is coming from

UBC economist Tom Davidoff

On Sunday, Robertson warned that due to “unregulated, speculative global capital flowing into Metro Vancouver’s real estate, we are seeing housing prices completely disconnected from local incomes”.