The discussion about the housing situation in Poland continues. The Left has just proposed a tax on vacant properties, of which there are about 2 million in Poland. Such tax exists in several countries. Vancouver, Canada, introduced it in 2017 and has seen positive results. The so-called empty homes tax (EHT) has since reduced the number of detached apartments in the city by 54 percent. – we read on canada.constructconnect.com.
Vacancy Tax Works. Vancouver Sees Positive Impact
A report from last December found that 52% of 1,398 vacant units changed status in 2022 because of the EHT. Since the new tax was introduced, it has also generated C$142 million in revenue for Vancouver, which has been earmarked for initiatives to increase the supply and availability of social housing and support tenants.
How does such a tax work? Owners real estate must report the status of their premises annually, regardless of whether they live in them or rent them. Owners receive instructions on how to fill out the declaration and information that an advance payment for property tax has been collected. Late payment is subject to a fine of $250 Canadian. The fee was initially 1% of the apartment's value, but has now increased to 3% and applies to apartments that stand empty for more than 180 days a year.
Vacancy Tax Increases Housing Availability. What About Prices?
Economist and lecturer Gherardo Gennaro Caracciolo calculated, that while the tax did not increase the number of new apartments built, it did increase the availability of existing ones. Between 2016 and 2021, the number of vacant units in Vancouver decreased by 5,355. Tax However, it did not have a significant impact on rental prices, which did not fall and remained stable. This contradicts the words of the Deputy Minister of Development and Technology Tomasz Lewandowski, that if vacant premises appear on the market, they will cause a “reduction price renting apartments”.
Caracciolo attributes the lack of impact on rents to high starting rents, which could have been raised before the tax was introduced, and the high demand for housing in Vancouver, which gives renters the sense that the rents they dictate will not fall regardless of supply. The economist believes that the vacancy tax has had a positive effect, but it is not enough to change the housing situation and that broader reforms are needed, including setting minimum public housing targets.
Canada, like Poland, is struggling with rising housing prices. Over the last two years, rental prices have increased by as much as 22 percent. Canada's housing program, however, differs from Poland's and primarily assumes the construction of rental apartments, for seniors and students, and houses at reduced costs. “There is nothing about a 0% loan” – macroNEXT analysts note. The vacancy tax has also been successful in other Canadian cities, including Toronto.