Not because patents are empty, but because this would create the incentive for patent owners to assess a real value to them, and not "bajillion dollars", which they do now.
A lot of old books or music still under copyright will never generate another penny of income, but putting them in the public domain could let them be mixed or used as a foundation for new creative works.
This idea is absurd. Classic copyright term limits, and patents being reserved for only specific implementations of an idea would fix these problems without taxing the hell out of everyone.
You do realize everything you write is copyrighted? This means you're going to have to file with the IRS for all your Hacker News comments on an annual basis.
Lines of code : Form a corporation, non profit entity or business, then pay a yearly copyright fee and transfer all code written to the business. The cost is proportional to the value of the copyright; if it's a small or unprofitable business the fee could be waived.
HN comments : the copyright is worthless anyway, people repost content all the time. To my knowledge no one has ever been sued over it.
Books and other publications : The publishers will pay for the copyright fee. Writers could be automatically covered for a grace period before publication with no fee, say one year.
These are all hypothetical,the point is you are immediately going to an extreme without considering what actual, plausible reform would entail.
Which...is something else that can and probably should change. What purpose does this serve?
Do you really want to live in a world where someone, anyone, can take something you've done and give it away to other people without your permission, or commercialize it and leave you with zero recourse?
Most people think copyright protection is for important, significant creative works like a book or a song, but it's equally important for less visible things. For example: A single method in your code that someone else appropriates.
If you had to register copyright for every line of code you wrote, you'd never get anything done.
I don't see any reason, however, that I need that protection for every single thing that I create. What purpose does _automatic_ copyright serve?
I stick a copyright notice in every software project already, but when I don't want the copyright I also have to explicitly disavow it. Why shouldn't the model be flipped to claiming copyright with a simple attached notice, instead of disavowing it?
> I don't see any reason, however, that I need that protection for every single thing that I create.
This is the social network problem. When the network starts to co-opt copyrights, demanding they're able to license the work you submit to them for any purpose, for any reason, without compensation, people understand that's a form of property theft and fight back.
The problem with "intellectual property" is it comes in forms both inconsequential and profound, and in the middle is a very, very grey area. There's been flippant comments on Reddit that have turned into screenplays. There's been stuff posted on Instagram and Pinterest that turned into a line of merchandise. These things have a way of growing in importance when you're not even looking.
Like code, where a quick throw-away hack might actually turn out to be a big breakthrough and gain popularity. This is why we have license like GPL, MIT, and CC that describe how your work can be used.
You're talking about a pre 1970 world where copyrights had to be registered, and honestly, that sucks. Can you imagine having to get each and every revision of your code officially copyrighted? What about someone stealing your idea you write about on Medium, or ripping your content wholesale and publishing a book. It's not stealing if it's not copyrighted, but thankfully it is. Automatically.
The problem with liability being < assessed values is then what's the incentive to work for a licensing deal? Why pay for a license when, worst case, you'll be taken to court to pay the same amount?
First of all: I'm not a lawyer and this is not legal advice.
You don't pay the full price of the intellectual property when licencing it, do you? The value of the intellectual property should be based on it's market value which would, in a perfect world be based on the expected benefit from that property. Also, paying for the damages for unlicensed usage does not mean you can keep using it unlicensed further on.
Wut ? “assessed value” ≠ “licence fee” ! The value of Windows for Microsoft is not the same thing that the value of one licence of Windows for your company ...
The proposed mecanism would just prevent Intellectual Vulture & co to gather a lot of worthless patents and then claim millions un court for patent infrigment.
> The problem with liability being < assessed values is then what's the incentive to work for a licensing deal?
If you upload a song you like, and tax has been paid for it as worth $100,000 that year, (which would be $1000/year), and you can license it for $1, then - yes, you have an incentive to license it for $1, because you are otherwise liable for as much as $100,000 (but not more).
Think this is stupid? Because under the current law, you are liable for $150,000. That's what the law says, anyway.
 Except for e.g. willful infringement laws, which would make you pay 3x as much potentially - another answer to your "what's the incentive".
Anyone see any reason why it shouldn't be?
Edit: to bring the concept to perspective, imagine having to assign a valuation to new borns so in the instance they die as a result of negligence the damages are capped at the assigned valuation of the deceased at their birth.
At the moment, patents are cheap compared to the value they have as an offensive weapon, and this is what I hope to address with my proposal.
As for copyrights - the same framework would make infinite extension unaffordable even for Disney, so I hope we would all benefit.
If you can declare $0 and not pay taxes on the IP you are basically coming full circle to existing taxation based on the income generated by the IP. However, the more important issue with your proposal is an IP holder might not want to declare $0, despite no current revenue, because your proposal would then tie that $0 valuation to potential damages in the instance of an infringement case.
>As for copyrights - the same framework would make infinite extension unaffordable even for Disney, so I hope we would all benefit.
As both a small business owner and consumer I have always been on the other side of the Disney argument. Why do you think we would all benefit from Disney losing IP protections? Most of the time its a innovation argument, but is their really any innovation being stifled by the Mouse?
As a business owner, if my company creates some form of IP, say a cartoon mouse whom I copyright/trademark to various degrees (name, logo, color(s), etc...),the company invests capital to create a movie starring the mouse and the market votes with their wallets, which the company pays taxes on, and like Steve Jobs I am fanatical about Quality Control and just keep reinvesting in the IP, creating products with the Mouse that the market love and keep paying taxes. Why, at some arbitrary point in time, should my company lose IP protections to the cartoon Mouse and all completed works with the Mouse? As a consumer, I currently know Disney for its high quality productions and there is a lot of goodwill with the brand that has been established over a lifetime, now with the floodgates opened and everyone able to profit off Disney IP there will be confusion in the marketplace leading toward loss of goodwill with the brand.
Copyright is willingly extended by the public to private interests for the purpose of fostering innovation and creativity.
The question isn't how do we benefit by Disney losing IP protections, the question is how do we benefit by maintaining what we have graciously given them? What return on investment, if you will, is the public getting for Mickey not being in the public domain?
For that year (alone), and I proposed you set it when you pay your taxes - that is, at the end of the year, in retrospect. In this case, there is never a reason for you to file anything other than $0 unless someone else is making money of it (if you are, then you're already being taxed on it).
> Why do you think we would all benefit from Disney losing IP protections? Most of the time its a innovation argument, but is their really any innovation being stifled by the Mouse?
It's supposed to be the other way around. We have granted Disney limited monopoly in return for wide availability. "Steamboat Willy" was released with the understanding that it will become public domain within 50 years. The question is, why on earth did we retroactively give another 100 years of that monopoly for free?
And even if it wasn't retroactive - the current 100+ years doesn't seem reasonable to me at all.
> Why, at some arbitrary point in time, should my company lose IP protections to the cartoon Mouse and all completed works with the Mouse?
The only reason they currently have these protections is that they bought them from Congress.
Why do you, as an employer, stop paying your employees a couple of months after you fire them / they quit? IP is not the same as work-for-hire, but it doesn't deserve the eternal protection it currently has. I am not aware of anyone who did NOT publish in 1930 because "I only get 50 years of copyright protection".
And ... you are arguing a strawman. I did not argue that IP should be abolished. Just introduce an economic cost to the unlimited monopoly, which is currently free.
Trademark is different. That rewards not the act of creation, but the ongoing investment in a brand. Do I want a huge quantity of something for above average quality and below average price? Buy Kirkland Signature. Do I want outdoor gear that will be covered no matter what happens? LLBean has me covered.
Disney almost surely makes almost no profit off of Steamboat Willy as a film, and in fact according to the copyright laws of the time, it wouldn't be covered today, so Walt probably didn't factor in the 21st century when amortizing his costs. Is there some teenager out there who could create some truly inspiring film by remashing clips from Steamboat Willy? I have no idea, but would love to find out. But a Mickey Mouse mug is more about trademark, and Disney should get to profit off that as long as people want to buy them. And if the teenagers film hurts the trademark, then that's something that could be resolved without an indefinite extension of copyright terms.
> Therefore, if at the end of the year neither yourself nor anyone else had made any money from your IP, just assign zero
How would that solve the issue of patents being used as a offensive weapon? Under your proposal if a patent troll has thousands of patents and has made zero revenue on them, they would pay zero tax. On the other hand if they made money, they will happily pay the tax.
I want YOU to value that patent (and the tax just make sure it is not arbitrarily high). When you sue for damages, you must have that estimate. I just want to force that to happen in a way that discourages over estimation.
> How would that solve the issue of patents being used as a offensive weapon? Under your proposal if a patent troll has thousands of patents and has made zero revenue on them, they would pay zero tax. On the other hand if they made money, they will happily pay the tax.
Court cases take years to start (and resolve). The patent troll's leverage is "if you don't license, I'll sue". If they have to pay $10,000 for every $1M patent, they will not be able to afford their current business model - they will not be able to sue for more than they paid taxes for. (The lawsuit is likely - and perhaps should legally be required - to be filed only after tax is paid).
This would force the patent troll to set the value to something balances so that they can afford the taxes while still recouping enough infringement damages.
An invention and subsequent patent is only the beginning of a pretty risky endeavour. There are significant risks in bringing a new product to market, such as in funding, timing, marketing, industrial production, and so on.
Overall they will average out. Some patents will be more successful than expected, and some will bomb. Large companies will be able to make a guess, pay the tax, and overall they'll make a profit. The risk on a higher value and paying the tax isn't such a big deal for them.
Small time inventors will be unable to take the risk and be forced to undervalue their own invention lest it bomb. They'll be exploited by large companies that will just pay the limited damages and then exploit their invention.
All this would do is cap the return of small inventors, without affecting the carpet-bombing large companies.
I hate patent trolls as much as the next HNer, but I don't think this idea will work, sorry.
I'm a small time inventor with one patent filed, but I didn't pay the maintenance fees (I had to publish but didn't want to spend thousands more making it final) because it didn't make enough money so it's now in the public domain. A large company could take my work. If they make a success of it where I failed, good on them. But I'll be owed nothing (rather than a proportion), which I think would be unfair since they'd be using my work. I'm already a victim of having been unable to spread the risk in a way that large companies can do.
> All this would do is cap the return of small inventors, without affecting the carpet-bombing large companies.
On the contrary. IBM and MS have tens to hundreds of thousands of patents. Keeping them all "Ready to sue" would cost them billions. And .. a small inventor who can't afford $100K in court fees does not have patent protection even if they have a patent.
> If they make a success of it where I failed, good on them. But I'll be owed nothing (rather than a proportion), which I think would be unfair since they'd be using my work. I'm already a victim of having been unable to spread the risk in a way that large companies can do.
So ... if you had paid $0, then a company made money of it, increase the value that year to $1M (pay the $10K tax) and have them license or sue them. You're better off under my proposed system.
So, rather, it would probably discourage patenting these things (in favour of keeping them deeply confidential) until their value has actually been proven, which goes against the purpose of the patent system in the first place, to encourage the disclosure of inventions in exchange for a monopoly on exploiting it.
Yes. At full value PER ONE YEAR. (Property taxes are per year, and the liability limit I propose is "per infringer per year" (or "per infringement per year" if infringement is defined in a macroscopic enough sense).
If I rent out a house, is it not enough to pay taxes on the income I get from rent ?
> Should I really have to pay taxes on it to keep it out of the public domain?
Yes. If you build a house with your own two hands, should you not pay property tax on it ?
The reason we have property taxes is because maintaining the environment around the house costs money. There's no roads and sewers and schools for books.
Also, a patent takes space by disallowing me to use the same kind of invention (even if I came up with it independently). And a copyright sometimes stops me from being able to use a "cultural common". They most definitely take space. And real estate property taxes are often supplemented by "road maintenance levies". They don't directly support the property's infrastructure when you really look into it.
Now when it comes to copyright enforcement, 99.99% of the copyrighted material out there is never formally published. It's source code, it's email, it's creative works produced and shared but never curated or packaged. How can you possibly tax all of that?
If only want to use the tax as a way to make sure orphaned works can be shared, and patent trolls become unprofitable. I believe that an IP tax can help both. I think it is essential to force proper valuation of IP, and I think tying it to recovery (upside) and taxes (downside) is likely to give a proper evaluation.
It is not my intention to try to tax your own painting on your living room. I assume, by default, anything not listed, is valued at $0 for that year.
Do you understand that, regardless for copyrights or patents, your IP is not enforceable unless you can afford the court action?
There's a solution to orphaned works: Reduce copyright to something like 25-50 years (plus life of creator?) and allow for one renewal, which requires a filing fee, for another 25-50 years. That's it. Suddenly all these orphaned works are liberated because it's not worth it for people to file.
Taxing based on valuation is absolutely, monstrously ridiculous. Many people write short fiction they publish online. Are you going to suggest they need to get an appraisal on their book, and then pay taxes on it? How many millions of people are going to review this and ensure that everything's tallied up correctly.
Orphaned works are a problem, but taxing them is not a solution.
I keep repeating (and you keep ignoring) that I want no such thing, except when they expect damages for copyright infringement.
Taxing based on valuation is what is effectively done for every kind of property. If IP is property, there is no reason it should be exempt. And if it isn't property, it's about time we stop treating it as such.
The implication is that if someone decides to copy it, your claim for damages in court is based on that $0. But if your intent is to keep a private copy in your living room without the willingness to share with the public who gave you the privilege of copyright in the first place, perhaps that still remains fair.
If your property has value, then you should pay property tax. If it has no value, you cannot claim damages if someone 'steals' said property since it wasn't worth anything. You can't have your cake and eat it. If you start taxing imaginary property, this will force IP owners to consider wether their IP has actual value or not and act accordingly.
Today, someone thinks of an idea, patents it and estimates its worth at $100M. Someone else develops the same idea and assigns a value of $20K. That's the error bar TODAY.
Inventor has no incentive for realistic estimate - they will always overestimate (no penalty for that). An infringer has no incentive for a realistic estimate (no additional penalty for that if he loses in court).
An ip tax will decrease the error bars by forcing the patent owner to pay for overestimates.
If you break through - then you'll have proof of value, be able to pay the tax, and sue/recover accordingly.
If you own a unused property, in comparison, shows you have significant funds
I propose that the value of IP for tax purposes is owner assigned. If you have no money to pay the tax, just declare $1. The catch is, that would make you ineligible to recover much more than that in the case of infringement.
As far as poor people, it changes little to none. But it grounds patent valuation, which are now arbitrary.
For example I invent and patent the widget and assign a $1B valuation to the invention. Apple violated my patent, manufactures the widget and sells $100M. Should I sue, my potential damages have nothing to do with the $1B valuation I made up but with the damages I suffered as a result of Apple violating my patent.
Alternatively I write a book and slap $1 valuation, because I assume there is no market for my writing or to avoid the big tax until I make it big. JK Rowling Violated my copyright and slaps her name on my book and sells millions of copies, again my damages have zero relation to the valuation I created for the IP.
The other part, about damages, is a grey area today. It is up to the jury/judge to decide how much value to assign to the infringement, but they start from arbitrary statements - which is why Oracle can claim 9 lines are worth $5B even though they've been giving them away for free for a long time.
This is the case already.
And no - there is no reason to tax IP at 1% of it's valuation.
Remember that patents eventually run out, in which case they are 'taxed at 100%'. :)
> Remember that patents eventually run out, in which case they are 'taxed at 100%'. :)
First of all, so what if they run out? Other kinds of property also depreciate and we still tax them.
Second, copyright has effectively ceased to run out around 1970. So there is every reason to tax IP.
Because there is an acute supply problem in Vancouver real estate. Making them pay 1% for empty homes incents people to rent them out.
The same arguments do not apply at all to IP.
"First of all, so what if they run out? Other kinds of property also depreciate and we still tax them."
'Depreciation' and 'expiration of patents' are not the same thing at all.
A 'patent' is the exclusive right to own a piece of IP for a period of time, after which it's public domain. It's basically pointless to add on a 'wealth tax' to a patent - there is already a tax on royalties and that makes sense.
When you buy your property, it does not become 'public domain' after 10 years - it's a completely different economic vehicle.
"Second, copyright has effectively ceased to run out around 1970. So there is every reason to tax IP."
Copyright and patents are totally different things.
Someone who created a unique song, has the right to protect it for quite some time. Moreover - it was 'made famous' by them, i.e. it's a brand that is invested in.
Disney should be able to 'own' Mickey Mouse forever - they created it, and they back it. They spend billions supporting 'Mickey' and there's no reason someone else should be able to rip them off by selling clones. In much the same way fashion brands are protected.
Drugs, algorithms, other kinds of solutions, there is definitely a 'public good' in those things being public after some time, so it's fair that IP protections run out.
Disney should be able to own Mickey trademarks for as long as they maintain them - but they shouldn't be able to tell me not to copy or remix Steamboat Willy. They got 50 years of monopoly on it they were promised when they released it. It should be public domain now.
People don't live in intellectual property. They live in homes.
There's a crisis of affordable housing in Vancouver. There is not a crisis of affordable intellectual property.
And actually, there IS a crisis of intellectual property. It is not a question of affordability, but rather of frivolousness, overreach and submarining. A tax is likely to solve some aspects of that.
Intellectual property is such a vast, ethereal concept that even pinning it down is damned near impossible.
That picture your kid drew that's on your fridge, do you pay tax on that? What if you put it on Instagram? What if your picture goes viral? What if it's co-opted by Wal-Mart and put on a bag, so you file a cease and desist? What if you make your own merchandise? There's such a slippery scale here that to tax everything, unilaterally, is absurd, and pinning down when something is impractical.
+ (with proper tenancy agreements which usually provide some balance of power between owner and tenant)
No, tenants have pretty strong rights in Ontario.
It's very difficult to evict someone who does not want to go.
In most other countries the landlord has the right to cancel the agreement with certain notice.
I am not a solicitor. I am not your solicitor. If you need legal advice on any of these issues stop reading and find a solicitor.
+ (not as much as most people assume because most tenants don't know or enforce their rights - wrongly thinking that it would be difficult when in reality the landlord will usually fold after a couple of letters long before things go to court.)
Scotland and England have differing private landlord tenancy laws so it's worthwhile checking the fine details in this respect. Scotland has a similar agreement to the Assured Shorthold and Assured tenancy:
1. Short Assured Tenancy where :
a) the tenant is entitled to remain in the property for at least six months provided they abide by the conditions of their lease. A landlord can only evict if there are reasonable grounds 
b) after the six months is up the landlord can then give notice to quit and the tenant has to leave 
In both cases these provide reasonable and fair conditions for both landlord and tenant.
2. Assured tenancies 
a) a tenant can more or less remain in the property for an unlimited period of time provided they aren't in breach of their tenancy agreement
b) the landlord has a much harder time evicting tenants unless there are "grounds" for eviction 
In this case the tenancy is skewed to be more favourable to the tenant and the landlord has to do a lot more work to secure an eviction [5[
In many cases now, most properties are let as Short Assured Tenancies. Anecdotally, my past three tenancy agreements have been Short Assured Tenancy agreements.
Tenant deposits are no longer permitted to be held by landlords or agencies and should be deposited into one of three tenancy deposit schemes within 30 days of the beginning of the tenancy .
Landlords and agencies are no longer permitted to charge for additional "costs" such as credit checks and "administration fees" on top of a tenants deposit and first month's rent. In England this obnoxious behaviour is still a plague on tenants seeking to rent .
Most landlords are now required to register with the Landlord registration scheme run by the Scottish government 
: http://scotland.shelter.org.uk/get_advice/advice_topics/payi... deposits schemes
If you want additional security you can always contract in for a longer minimum lease, for example twelve months. Alternatively hunt around for a property letting company who's long term business is just letting.
At the end of the day, nothing is permanent if the landlord stops paying their mortgage or other loan secured on the property you're renting.
There is also the social housing sector - Council Housing, Housing Association and Housing Co-op's. These can provide much longer term rentals, however they can be a bit harder to obtain due to lower monthly rents which can cause waiting lists. There tends to be less flexibility on property size and type, i.e. you'll get to rent what is deemed legally and healthwise necessary for your circumstances; for example if you're single don't expect to get a three bedroom home, those will be allocated to families.
In Germany, selling the house makes no nevermind to the tenants. Considering how many people rent here, it just makes sense to encourage long-term tenancies, they lead to better communities.
Why pay for your service (assuming it's not tongue-in-cheek) when you can pay for a property manager (lets be generous and say 10%) and also get rental income to offset the investment?
Ultimately, that's why the city is doing this; Whether the property is rented or owner-occupied, there will be a consumer who is adding to the economy.
UK/London really has a problem with non-occupance - they should definitely follow suit.
Would you care if you purchased a $1m home cash to flip it in a few years for $1.4m?
1. Pick a hot up and coming city.
2. Buy 5 properties at $1m each.
3. Sell in 2-4 years for double the value, preferably paying no tax on the capital gain at all if you (somehow) can.
Rinse and repeat. It's what happened in London in 2008-2014, etc.
You just, as an investor, need to be aware it's a bubble.
Having both a clear exit price and timeframe in mind when buying is probably a good way to do it. Even if a property bubble starts to collapse, there is usually still sufficient time to get out.
Yeah, that worked really well for me in 2004 – 2009.
If you believe property to be (significantly) overvalued, then you should rent instead of buy. If you're at the end of a "boom", then it's not unreasonable to wait it out and see how prices progress. Low interest rates also tend to push residential prices higher, because people can pay off more principal monthly vs less if rates are higher. When buying property it's almost always better to buy when rates are high and refinance later than to buy when rates are low.
Buying high and selling low is also definitely a thing. That doesn't necessarily mean you can't find a good deal somewhere (you can), but it'll be much harder.
Tldr: Unlike what most people believe, property is not a "sure thing" investment.
Prices today 3 times what they were in 2004. Well above inflation.
Rest of the country, that doesn't attract the "need to hide my money from a foreign tax man" crowd, not so much.
Its about having more money than you know what to do with.
assuming it's not tongue-in-cheek
No, the city is doing this to increase housing supply. We do in fact have a housing crisis in Vancouver, this isn't just political rhetoric. When I was looking for an apartment about a year and a half ago, it was impossible to find one on the open market. Every open house had dozens of people showing up. I was eventually able to get a place through a personal connection; 10000 more units on the market would have made the process a whole lot easier.
He's literally made reverse Airbnb.
This can be a very good option if you need temporary housing. My brother did this for half a year to save on rent while his new house was being built.
The question is whether the house is a principal residence or an secondary residence/investment.
I mean, I guess you could base your business on helping people break laws, like selling dummys for getting commuters the passenger lane, but your customers are no less guilty than they already were.
That said, I wouldd pay you 0.5%/y to live in (ie rent out) your property -- that works out to 400/month on a 1M property
Just like personal taxes: Don't work, just inherit money and invest in blue-chips.
It's also surprisingly egalitarian, or at least against conspicuous inequality; you can accumulate a fortune in a Swiss bank, but you can't build a mansion that annoys your neighbors.
One nit to pick: even with imputed rent, without a land rent tax the property market would continue to distort incentives and mis-allocate capital. Meaning we will continue to see 'investors' chasing capital gains instead of yields (the literal definition of 'speculating'), funded almost exclusively with bank debt. Unless our political leaders grow a spine (and, in many cases, a brain), we'll continue to lurch from one financial crisis to the next as a consequence...
The next one is shaping up to be epic. Like, "it's time for WWIII" epic...
If you own sports equipment, should you be taxed on the imputed income you could have gotten from renting it out?
If you're married ...
Vancouver real estate prices jumped 20% in 2015 -- a $200k gain on a $1M house. If pricing trends continue along that trajectory then Vancouver real estate still looks like a great investment even if you just eat the entire tax.
Still, I'm impressed by how quickly Vancouver is moving forward with these measures (going into effect Jan 1st!). They're sorely needed, and it's great that they don't have to sit in limbo for years before being enacted.
As per the article: They didn't, it's 1% of the property value. The title is misleading.
> If pricing trends continue along that trajectory
It will not. That is a bubble.
My intuition, as well as pretty much everybody else's, is that prices will fall, when things start moving again. But it's far from certain yet, because that hasn't happened yet.
Too much information is lost, in the "average selling price" statistic that graph is using, to be able to use it to definitively claim anything like "an equivalent house is selling for less than it would have before".
For example, that graph could just as well be caused by fewer high-end houses being sold, but the houses that are being sold going for the same amount they would have before.
Again, I think it's very likely bordering on totally inevitable that prices will drop, and that that graph is probably showing that. But it's not enough information by itself to make that claim.
That's the goal with this tax.
The earlier tax by the province is to discourage investors.
The problem at stake is that Chinese buyers are not buying property in Vancouver for speculative investment purposes only.
They see these properties as safe stores of value in order to diversify their risk profile in case the situation in Mainland China or their own financial situation goes down the gutter,
and / or to support their future potential effort to gain Canadian residency / citizenship for themselves or their kids,
and / or to vacation outside of mainland china once in a while.
Sure, this tax will hurt some of them, but the number of Mainland Chinese people with the means to write off such an amount as the cost of security is massive.
Source: lived in Mainland China for a few years, worked for this specific demographic.
Contributing to the Vancouver economy and rental market?
This demographic could not care less, this does not factor in their decisions.
(I have only empirical evidence of this mindset, but I would be willing to expand on what I base my reasoning on.)
To get around it you will need a business license for each unit, which is also taxed. Business license #'s must be displayed on the temporary rentals website under the listing. Business licenses can only be obtained with permission from your strata. They think they can free up another 2000+ rentals this way as well.
AirBNB is running an insane ad campaign here that mostly pisses off every Vancouverite I know in my echo chamber of EVERYONE UNDER 35.
I work at one of the big Universities here. It is crazy biking in the summer through affluent ghost neighborhoods. Lots of the older big houses that were tore down were rentals to like 6-8 students at a time, or had basement suites. Now they are empty boxy white McMansions.
Policies over large numbers aren't about %100 enforcement, a general behavior modification is considered a success usually.
That being said I'm happy to be proven wrong, but can we expect any sort of data to support a hypothesis? I'm not sure as I'm unfamiliar with Canada's policies on access to public data.
There may be some question with privacy (e.g. proof of leases/lessee), corporate-owned residences, etc. but I'm sure they've factored that into things. The big deterrent to lying about it is probably the magnitude of the penalty for doing that - it's kind of like Martha Stewart: she didn't do time for insider trading, she did time for lying to the FBI (about insider trading).
EDIT: and the goal isn't to make revenue, it's to free up rental stock. If all the money collected goes towards enforcing the system and 20,000 vacant units end up in the rental market, then the policy is a total success.
Yep. You can see that with wealth taxes. Most countries that have wealth taxes (e.g. France) make close to nothing from them, because it's inefficient to verify and collect all the data to properly levy the tax, and you need a lot of civil servants for that.
About 5% of Melbourne's housing stock was recently found to be unoccupied, using water usage data. It was closer to 19% for investment properties.
"Why didn't you use any power?!?!"
"I have solar"
"Can you give an alibi!?!?"
"I was home alone"
"Not good enough, pay up!"
Yes, it can be enforced.
For example, in the US. Housing associations have staff that run around in cars taking photos of literally everything. Grass too long - Fine. Bins out outside of trash date - Fine.
This happens daily. I know because I used to live at an HOA.
My point being, hire individuals with cars to keep track of houses. Have photos of non-residency and then impose heavy fine to recoup costs.
This is a big difference between the west and a country like the PRC where strong rule of law isn't a given. In the west, they will simply ask, with the caveat that perjury is a serious crime if you are found out. In China, they will figure out another way since trust isn't assumed and lying is considered a much weaker offense. Completely different systems.
(The PRC is trying to go in a trust direction with income self reporting, but it doesn't affect the taxes you pay, oddly enough.)
(Vancouver slaps $10,000 a year tax on empty homes. Lie about it and it’s $10,000 a day)
> When you're throwing two million dollars at a house,
> sight-unseen, that you then let stand empty for years,
It sucks, you'd rather keep your $20k, of course. But it's not worth risking cheating it...
And I'd assume that if you're declaring it as your principal residence but you're registered elsewhere for little things like voting it may trigger investigation that could get Very Expensive if you are determined to be lying.
I don't understand - what if it's neither ?
What if you are a plain old canadian who has a home in Vancouver and (for instance) a home in Golden ?
It's not at all unreasonable to have a home that:
a) is not your primary residence
b) you live in for 2-3 months of the year
c) you have no intention of renting out because you go there regularly or sporadically
What does one do in that circumstance ?
It is proposed that doing so imposes a negative externality.
That proposal is not without counterpoints, however.
Specifically: that the owners of those homes not only pay their full property taxes already, but they impose fewer costs on the infrastructure of the city while not being present. They don't drive on the roads or walk on the trails or use the public restrooms, etc.
Look, I proposed a hypothetical situation that has nothing at all to do with Chinese speculators buying up housing assets in a safe haven market. I proposed an unintended consequence on an otherwise innocent, well meaning actor. It's very interesting to note that the response is, basically, "too bad for them".
 I don't live in Canada.
They could declare the condo their principle residence, but then they would encounter complications regarding their vehicles, which are typically not used in the city. (They prefer transit, and trucks don't fit into condo parking spots well)
They aren't participating in property speculation and have owned the condo for around 5 years now.
So, I think they are a good example of innocent, well meaning actors who are being unfairly taxed by a law that is well-intentioned but not quite properly formulated.
I think you're right there is probably isn't a loonie cost to the city that can be recouped with this vacancy tax. But I also think your counter-point is moot. Vancouver isn't trying to keep revenues up, it's trying to encourage a certain behaviour, namely more housing and rentals on the market.
While I do think this vacancy tax is a good idea that could help out affordability in Vancouver, I agree with you that it's far from the best that Vancouver could do and is really only addressing the symptoms rather than the cause.
I'm a skier :)
Or AB&B the house all the time you're not there. Would that count as renting?
> you're privileged white male in IT
You got me there.
Real case: the parents family houses are in the mountains, parents moved to city, children (adult now) live in another city. They'll eventually inherit the 3 houses and they won't use them. The city house can be sold or rented. The other ones, not a chance. If taxes on them would be too high (they aren't now) they could rather destroy those two houses. I don't think this is what we want.
There is always the way out of renouncing the heredity. Then you still get an empty house that nobody wants and nobody maintains.
It's interesting how people circumvent incentive-laws.
The overhead wasn't 0 before, it was the opportunity cost of not renting out the house. Now the opportunity cost has increased significantly.
At least Vancouver is trending in a positive direction.
My guesstimates were not far from what the city hall counted in 2015.
B.T.W. I'm no longer living in Vancouver
I imagine an investor keeping his or her $30M mansion just as a hedge against RMB depreciation and keeping it empty will think nothing of the $10,000 fine.
> The empty-home tax will take effect by Jan. 1 and will be calculated at 1 percent of the property’s assessed value.
The problem with a supply only solution is that supply takes time to create, and there are limits to the rate of supply creation (ie. how many trades are available). Even if city government really made a push to increase the pace of supply, they only be able to move the needle slightly, and it'll take years for that supply to appear. If the speculative demand is overwhelming it might not have a noticeable affect. I would say this has been the case for the last several years where Vancouver housing starts climbed to the highest it has ever been and yet prices climbed ever higher.
If you want to solve the problem quickly, you need to not only increase supply, but also have a look at curbing speculative demand.
Vancouver itself is attractive to investors because it has a very mild climate, is close to Seattle and the rest of the U.S. West Coast is a short flight, and it's much closer to Asia than the rest of Canada is.
It's also a very beautiful place with lots of amenities for those living there rather than overseas investors or occasional business travelers.
Vancouver also welcomed multiculturalism which helped a lot.
The city has since moved on (like all cities with time and technology) but I think many people still want that feeling of what it was like in the 90s. It was just a extremely nice place to start a family.
I think you should have to live in your home at least six months of the year (sounds weird!) that would also appease snowbirds.
If the owner can't be there for six months of the year then require the owner to rent or lease it.
It's also somewhat common to fine owners of unused urban houses because they attract "transients" and cause other assorted problems.