Vacancy tax

A vacancy tax is a type of excise, or use tax, on properties, either commercial or residential, that are unoccupied or vacant, for a specified amount of time.

Jurisdictions may choose to implement vacancy taxes as a means to incentivize property usage, increase housing supply in areas with high residential vacancy rates, disincentivize real estate speculation, and to incentivize landlords to lower rents sufficiently to fill empty commercial or residential properties.

Depending on the jurisdiction and specific implementation, these taxes may apply to any combination of seasonal “vacation” homes, empty investment properties, unoccupied rental units, or commercial properties.

United States

Vacancy taxes, or their functional equivalents, have existed in the United States since at least 1982.

Utah

Utah has had a functional vacancy tax since 1982. The state exempts 45% of a property's taxable value, applicable only to residential properties “used as a primary residence for 183 or more consecutive calendar days during the calendar year.”

Washington D.C.

Washington, D.C. assesses an annual tax of 5-10% of property values on vacant or blighted properties since 2010.

Oakland, CA

The City of Oakland, California assesses an annual tax of $3,000 to $6,000 on vacant property. A property is considered “vacant” if it is “in use less than fifty (50) days in a calendar year,” and not subject to any of ten (10) exemptions. Oakland's vacancy tax, Measure W, was passed in 2018 with 70% voter approval. Oakland's of vacant parcels declined 3% after the taxes first year.

Berkeley, CA

The City of Berkeley, California assesses an annual tax of $3000-$6000 on residential units occupied less than 183 days per year. Berkeley's vacancy tax, Measure M, was passed in 2018 with 65% voter approval.

San Francisco, CA

The City of San Francisco, California assesses vacancy taxes on both vacant commercial and residential properties.

San Francisco's Commercial Vacancy Tax (CVT) is a tax on keeping certain commercial spaces vacant for more than 182 days in a calendar year. It is assessed at $250-$1000 per linear foot of frontage, and was passed as Proposition D passed in March 2020, with 70% voter approval.

Sam Francisco's Empty Homes Tax (EHT) is a tax on residential units not occupied more than 182 days per year, assessed annually on a sliding scale from $2500 - $5000 depending on square footage, for 2024, increasing to $10,000 - $20,000 by 2026, and scaleing with inflation. It was passed by citizen’s ballot initiative, Measure M, with 54% voter approval in 2022.

Canada

Vancouver, BC

Main article: Bill 28 (British Columbia)

The city of Vancouver passed a Vacancy Tax known as the Empty Homes Tax (“EHT”) in 2017, initially at a rate of 1% of assessed value. This was increased to 1.25% in 2020, and then to the 3% in 2021.

The stated purpose was “to address the housing affordability and availability challenges and to increase the supply of rental housing in Vancouver.” The 2023 EHT annual report stated that, as a result of the tax measure, “the number of vacant properties decreased by 54%.”

France

A vacancy tax called “taxe sur les logements vacants” (TLV) is assessed on residential units that are empty of furnishings. A separate tax “taxe d’habitation" (TH) is also assessed on non-empty residential units at higher rates wealthy owners, and for non-primary (e.g., vacation) residences.

Ireland

Ireland assess Vacant Homes Tax (VHT) equal to 3x the property tax bill on homes occupied fewer than 30 days per year.