(Quebec) Quebec gives the green light to cities to tax vacant or underused housing, such as those reserved primarily for Airbnb-type rentals. Montreal could collect 10 million per year, according to government estimates.
What there is to know
The government has tabled a bill on municipal taxation.
Cities will be able to impose a new tax on vacant or underutilized housing and vacant lots.
Quebec grants them new powers to accelerate the construction of housing.
The new tax is provided for in a bill on municipal taxation that the Legault government tabled in the National Assembly on Thursday, the day after the conclusion of the “Declaration of Reciprocity” with the municipalities – the formula which now replaces the traditional fiscal pact.
The new tax would apply to any accommodation unoccupied for at least 180 days per year and would amount to a maximum of 1% of the value of this accommodation.
The owner of a $400,000 building that is unoccupied or underused would have to pay $4,000 to the municipality which decides to take advantage of this new taxation power, according to the example provided by the sponsor of the bill, the Minister of Municipal Affairs, Andrée Laforest.
PHOTO MARCO CAMPANOZZI, LA PRESSE ARCHIVES
Andrée Laforest, Minister of Municipal Affairs
Cottages would not be affected by the measure. But the owner of a triplex who reserves one of his accommodations or all of his accommodations for rental on Airbnb would be taxed.
There are thus “too many homes currently being kept for subletting or rental” while “we are in a period of housing crisis”. They must be made available to the population looking for a roof over their heads, argued Andrée Laforest at a press conference.
“I will give the best example: in the Magdalen Islands, there are people who keep the house, the residence or the accommodation, rent it or rent it only three months a year, four months a year […] then for the rest of the year, the house or accommodation is vacant. So, it is certain that we said to ourselves: with a municipality in a housing crisis, we cannot accept that housing is vacant like that,” explained the minister.
The bar set at 180 days
According to the bill, “housing occupied for a minimum of 180 days per year by its owner, by a person with whom he has, or had, a relationship or relationship is not vacant or underused. alliance, including through a de facto spouse, or a close relationship or by another occupant due, in the latter case, to a lease lasting at least 180 days, including including a sublet.
Quebec chose to set the bar at 180 days “because we still have to respect people who travel abroad six months a year,” said Andrée Laforest.
The government also allows cities “to increase the maximum rate that can be set with regard to the category of vacant land served and to divide their territory into sectors for the purposes of imposing the general property tax.” A city could quadruple the tax rate.
A municipality could modify its property tax system “to give a tax holiday or have a different category for social housing or affordable housing,” added Andrée Laforest. Quebec allows cities to spread out the payment of the duty on real estate transfers. Municipalities also gain the power to provide financial assistance to businesses.
Quebec enshrines in the bill the annual payment to municipalities of revenues derived from the growth of one QST point, a measure introduced with the previous fiscal pact concluded in 2019. This financial transfer will represent 445 million in 2024, 881 million in 2028 and 1 billion at the turn of 2030.
“Superpowers” to counteract the footsteps in my backyard
For her part, the Minister responsible for Housing, France-Élaine Duranceau, wants to allow cities to quickly authorize housing construction projects even if they do not comply with urban planning regulations. To counter the walk-in-my-backyard reflex and the risks of citizen referendums, she will give them “superpowers” thanks to amendments to her housing bill.
PHOTO EDOUARD PLANTE-FRÉCHETTE, LA PRESSE ARCHIVES
France-Élaine Duranceau, Minister responsible for Housing
Cities are given permission, for a period of five years, to skip all other approval stages for housing projects that do not respect or deviate from current regulations, after holding a public meeting.
France-Élaine Duranceau, Minister responsible for Housing, in interview with The Press
The City of Montreal could thus save nearly a year in delays for issuing construction permits for housing projects. Note that throughout the metropolis, these delays have increased on average by 34%, if we compare them to those of 2018, according to data obtained and analyzed by The Press.
Another important modification: Quebec will allow the construction of accessory dwelling units throughout the territory.
This will allow citizens to add a floor to their house to create housing, or to transform a garage adjacent to the house into housing, for example.
“It saves municipalities from having to change their regulations. All municipalities have access to it, but they can refuse it. We are not imposing anything,” said the minister.
An accessory dwelling unit is a private, self-contained apartment built into an existing dwelling. It includes a bathroom, kitchen, living room and bedroom. It must be installed inside the residence, in a garage or a converted basement, for example.