A tax on vacant homes could have a negative impact on the housing market in Toronto.
The Toronto Real Estate Board says that the Ontario government’s proposal may bring unintended consequences and says there is not enough empirical data or evidence to support the tax.
“At this time, it is not clear that the issues targeted by a vacancy tax are fully understood, nor is it clear how effective such a policy would be, or if it would have unintended outcomes that run counter to the stated City benefit of increasing rental supply,” says TREB President Tim Syrianos.
Syrianos says that a better policy to increase starter and ‘middle’ homes, is to lower taxes rather than add to the tax burden.
He also warned that the tax income that the City of Toronto is expecting may not cover the costs of implementing and managing the tax, citing Vancouver’s tax with $5 million start-up costs and just $700,000 a year annual net revenue.
There is also the issue of private property rights.
“The application of a vacancy tax on a property owner who is abiding by property standard by-laws, zoning rules, and all other municipal requirements must be carefully considered,” adds Mr. Syrianos.
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