Many people are actually not very wealthy, they use the second home to raise the house and transfer the burden to the tenant. This creates a lot of conflicts between the tenant and the landlord. The landlord is also suffering because they need to repay huge amount of mortgages.
Only few people are real speculators, but they take advantage of the speculative attitude of most homeowners, so real estate speculators always can easily control the steering wheel.
For the housing crisis, most of the solutions are to build more affordable rental housing or increase supply. The question is that the construction of a large number of affordable housing does not absolutely reduce the rental price, because the rental price is directly linked to the landlord's mortgage and property tax. If the house price and property tax cannot be reduced, then the rent will not be reduced. Renting and buying are two separate and interrelated markets. If the house price can't be hit, then the price of renting is hard to come down.
The construction of affordable housing lasts for a long time and is costly. Only very limited people can benefit. Now, young people and working-class are also affected by housing crisis. So, subsidizing renters is the most direct and only effective way to solve this problem.
The source of funding for this subsidy is from those who own second home.
The detailed method is as follows:
If there is only one home, then it doesn't matter if the homeowner lives in this home or not, it is always considered a reasonable investment and is not subject to taxation.
If a homeowner has two homes, there are two scenarios:
A, one home is in Richmond, the another one outside Richmond, but still in Metro Vancouver.
B, both are in Richmond.
Depending on whether or not the homeowner actually live in this home,, these two scenarios can continue to be subdivided into five situations:
A1, the homeowner does not live in these two homes;
A2, the homeowner lives in a Richmond home;
A3, the homeowner lives in a home outside of Richmond, but that home is still in metro Vancouver;
B1, the homeowner does not live in these two homes;
B2, the homeowner lives in one of Richmond's homes;
For A1, it is considered speculative and a tax of 0.45% of assessed value is imposed;
For A2, it is considered a reasonable investment, no tax;
For A3, it is considered a lite version speculation and a 0.2% tax is imposed;
For B1, it is considered speculative and a tax of 0.35% is imposed;
For B2, it is regarded as speculation, the tax is not collected from the home that homeowner lives, and the another home is subject to a tax of 0.1%;
If there are three or more homes, it can be subdivided into two cases:
C1, the homeowner lives in a home outside of Richmond;
C2, the homeowner lives in one of Richmond's homes;
For C1, it is considered speculative and a tax of 0.55% is imposed;
For C2, it is considered speculative, there is no tax on home that owner lives, and for other homes in Richmond, a tax of 0.3% is imposed.
The above does not apply to the home that was purchased before 2008. in another word, these homes bought before 2008 will be exempted.
Regarding family size, for families with more than 3 children under the age of 19, B2 can be waived;
For those who have parents and parents are citizens or permanent residents and live separately, parents do not own a home and can be exempt from B2.
for multi generation family, three generations of the family have more than six people and live together, the second home can be exempt.
The above applies to Canadian citizens and permanent residents.
For homeowners who are non-citizens or non-permanent:
D, whether it is one home or multiple rooms, and whether or not the owner lives in it, all the tax rate is 1%.
All funds are used to subsidize the renters that families' annual income is less than 80,000.
The exact amount of subsidies depends on the amount of tax collected.
The eligibility for the application is the renter must have lived in Richmond for more than one year. The signature of landlord is required.
For newly moved to Richmond, you must be working in Richmond to be eligible to apply.