Will Property Tax Increase for Residential Homes in 2020?

The real estate market is set to experience significant changes in the city of Vancouver as property tax increase on residential homes has been proposed. In addition, the initial empty homes tax of 1% has been increased. Read more from real estate expert, Steve Saretsky, as he breaks down the various changes concerning the real estate market in British Columbia, Canada.

Latest on Canadian Real Estate Market Trends by Steve Saretsky

Happy Monday Morning!

The politicians responsible for the city of Vancouver have generated quite the buzz these past few weeks. Despite the drop in home prices over the past year, the city is still mired in a housing crisis. Vacancy rates remain submerged below 1%, affordability remains stretched, and with housing sales bouncing 50% year-over-year in November it suggests these problems aren’t going away anytime soon.

Thus, city officials are proposing more measures aimed at curbing demand and relentless housing speculation. A bevvy of tax increases is set to be imposed on property owners in 2020. The city has proposed an 8.2% property tax increase for residential homes in 2020. If the council passes the city budget as proposed on December 03, it would mean an estimated increase of $354 for the City of Vancouver’s portion of the property tax bill on the median single-family home, from $3,809 to $4,163. It would be the largest increase in more than a decade.

In addition, the city has opted to increase the annual empty homes tax from 1% to 1.25% with a provision for additional increases in both 2021 and 2022. The announcement comes just days after declaring the empty homes tax had generated $39.4 million in revenue during the 2018 tax year. “While the ultimate goal is to add more pressure on empty homes to be filled, any additional revenues will now be used to provide housing for Vancouver’s most vulnerable residents”, noted mayor Kennedy Stewart.

Perhaps in a rather ironic fashion, during the same week the city came out with another round of policies labelled as attempts to curb run-away prices and increase affordability, property Developer WestBank made headlines with the official unveiling of their $5M dollar spinning chandelier hanging under the Granville Street bridge. With angst growing and a populous separating further and further apart between the haves and the have nots, nothing spells class warfare like a spinning chandelier dangled above the cities homeless. Love it or hate it, the optics are incredibly bad and further adds to the incredible memoir that will someday be written on the Vancouver Real Estate market.

If that plot wasn’t thick enough, a seemingly giddy Vancouver Mayor Kennedy Stewart suggested the chandelier was, “the most important piece of public art in the history of our city.”

For all the wrong reasons, no doubt.

It is certainly symbolic of the cities issues over the past decade.

Three Things I’m Watching:

1. Canada has the only inverted yield curve in the world. That may be a problem.

2. Despite the slight correction in the Canadian housing market, employment in the real estate sector remained stable at nearly 10% of the countries workforce.

3. City of Vancouver proposes largest increases to residential property taxes in over a decade.