Owners of vacant storefronts in Vancouver may face another tax, similar to the one imposed on vacant homes in the city, if the provincial government gives the green light to the idea.
A majority in Vancouver City Council voted on Wednesday to ask the province to investigate the measure in a bid to target real estate speculators.
“Investors are buying commercial properties, sitting on them and waiting for them to deteriorate,” Mayor Kennedy Stewart argued as the measure was discussed.
Tonight I asked the Council to join me in calling on the province to investigate the empty shop tax.
Just like homes, commercial properties have jumped in value, but many remain empty.
I’m not surprised that the same people who oppose the tax on empty homes have also opposed it. # Vanpoli pic.twitter.com/oCpNifhOla
– Kennedy Stewart (@kennedystewart) April 27, 2022
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In Chinatown, where the vacancy rate is around 18 percent, the proposal met with less than an enthusiastic response.
“It’s just ridiculous to consider it a matter of speculation,” Jordan Eng, president of the Chinatown Business Improvement Association, told Global News.
Read more: Epidemic of empty windows: taxes, bureaucracy strangle entrepreneurs, say Vancouver-based companies
“The city really needs to look at itself and look at how it handles its own real estate when you have the park in Chinatown, which has 73 percent free space in the park.
The property Eng is talking about is the city’s Chinatown Plaza at 106 Keefer Street. Estimated at $ 14.7 million in 2021, more than half of the retail units remain empty.
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Other BIAs in Vancouver say bureaucracy and escalating property taxes are to blame for commercial vacancies.
2:05 Provincial rules stand in the way of more empty tax houses in British Columbia Provincial rules stand in the way of more empty tax houses in British Columbia – July 7, 2019.
“Businesses occupy seven percent of property and pay 43 percent of taxes. That’s the problem, “said Neil Wiles, executive director of the Mount Pleasant Business Improvement Association.
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The city has to tidy up their house before they look at something like a vacancy tax.
Wiles said the city should prioritize issues such as waiting for permits to be approved, which could take months or years.
Stewart insists that any potential tax would be targeted only at speculators and would not apply to vacant properties in the city or “good” landlords.
“We definitely do not want to punish property owners who try to improve their property and start their own business,” he told Global News.
Read more: BIA in Chinatown, Vancouver hopes to turn the dying city estate at Plaza Mall into a culinary center
“If we do it right, we will reduce rents for business owners, and that’s what’s important here.”
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Paul Sullivan, Ryan ULC’s tax agent, told Global News he was unfamiliar with leasing agents who have vacant space to speculate on the market.
“To assume that people would rather pay their mortgages out of pocket than through investment income with tenants is ridiculous,” he said.
“It’s just not real.”
For now, the controversial proposal will remain just an idea: the city does not currently have the power under the current law to introduce a tax on empty shops.
As with the Vancouver Vacancy Tax, the provincial government will have to amend the Vancouver Charter to allow the city to act.
© 2022 Global News, a division of Corus Entertainment Inc.
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