Hacker News Reader

Comment by huangc10 | Hacker News Reader

I grew up in Vancouver and I think this law is necessary (maybe). The big question here is...how do they tell if the house is unoccupied or if the owner is on an extended vacation? Can it really be enforced?

View on HN

Well with a gov't power monopoly, they can do things like check power and water utility usage. You can also look at tax return address records for the BC income tax part. Driver license / BCID / immigration records are another. You can also do a 'prove you have a resident in X months or be assessed fines' like many HOAs and mortgage agreements do for various things.

Policies over large numbers aren't about %100 enforcement, a general behavior modification is considered a success usually.

They do this in Monaco as well. I read in an article a while back that some nonresidents have automated timers to turn on/off the lights, turn on the heating, water, etc.

I think that's mostly for tax avoidance purposes. So they can claim they were in Monaco for tax purposes - Avoiding taxes in their home country.

Tax evasion, actually. But yes. Was just implying that checking (or data mining) might not always lead to positives when you're dealing with cunning individuals.

I was going to say this. These rules will drive investment in home automation. I'm also willing to bet that a large portion of the revenue generated from this scheme will be spent on the manpower necessary to enforce it.

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.

> I'm also willing to bet that a large portion of the revenue generated from this scheme will be spent on the manpower necessary to enforce it.

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.

The goal in this case isn't to make money but to have more apartments/houses for rent (and hopefully lower the prices too)

Or maybe, just maybe, some homeowners will be incentivised to actually rent the house out to someone who needs it.

Home automation won't help in this case, though I suspect there will be some level of falsified leases. It seems that if it's a privately owned residence, it falls into one of two categories: Principal residence or not principal residence. If it's a principal residence, there are likely other documents that would also utilize that address (voter registration, healthcare, drivers license, taxes, insurance). If it's not a principal residence, is it leased out for at least 6 months a year on leases of at least 30 days? If yes you're fine, if no you're fined.

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).

The proposed fines for trying to defraud the system are much higher than paying the 1%/year tax. It's like parking: pay $5 to park for an hour, or take a 1 in 5 risk of a $100 fine. Most people pay for parking.

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.

> they can do things like check power and water utility usage

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.

http://www.abc.net.au/news/2016-04-18/call-for-vacancy-tax-o...

Agreed, and it's likely more about sending signals to the investor class. And make noises like they're doing something about not being able to afford to live here. The government doesn't want prices to crash, because then homeowners would be screaming. But they do want to let the air out of the balloon a bit.

It's not a criminal trial. The burden of proof is low and the onus is on the homeowner, not the city. So if the city decides your property is vacant, you can go ahead and prove you were there, or you pay up.

That's going to go well.

"Why didn't you use any power?!?!" "I have solar"

"Can you give an alibi!?!?" "I was home alone"

"Not good enough, pay up!"

So cynical...give it 6 months

> Can it really be enforced?

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.

That doesn't seem feasible for an entire city at all.

It wouldn't be a daily thing. Maybe once every other year at most. The cost would be minimal to the government to hire a few contractors for a one-day thing.

Sort of like how the Consumer Price Index gets calculated, then.

If you are thinking about having someone driving around to photograph everything frequently, yes. But a couple of cars outfitted like the Google Street View cars, each given a section of the city to drive every other month or so is very feasible. You could also put cameras on any public transit vehicles to keep photos coming in from vehicles that are already being operated by city funds.

Why not? If you are looking at least 10k/house in taxes, it's very efficient to have a full time staff to check out the recently flipped (well...) MLG houses.

Just have a neighbour reporting line (/email/site). If you're really having trouble finding places, add a finder's fee of 10% of the fine.

Easier surely to use existing data such as number of letters delivered, electric bill, water bill, voter turnout, etc.. Amalgamate that and send a person to the property. Requiring property maintenance companies to register the properties they work on, eg "for health and safety reporting", might be useful too.

They ask politely, and you either lie or tell the truth.

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.)

Here is a better description:

http://www.calgaryherald.com/vancouver+slaps+year+empty+home...

(Vancouver slaps $10,000 a year tax on empty homes. Lie about it and it’s $10,000 a day)

I think Vancouverites are going to be phoning in to report their neighbors.

I think there is a similar issue in Geneva.

They can't - this is all for show.

Why post with such confidence when you're not informed?

When you're throwing two million dollars at a house, sight-unseen, that you then let stand empty for years, how difficult would it be to hire a housekeeper to come around the place every week, and make it look lived-in?

you might as well actually rent it out at that point..

That means tenancy contracts, risk of damage, and a whole raft of legal obligations.

If you're an absentee building owner, you don't (can't, really) worry about any of those things yourself. Instead, you lease your building to a property management agency, who handles all of that for you.

Well being a tax cheat also introduces a whole raft of legal obligations...

I mean, as compared to the cost of making it look lived-in, or just stopping by so as to technically "be occupying it". Rents in Vancouver are at a very low ratio to the cash value of property, as bad as 70:1 (value:annual rent.) In the normal world, it's more usually 20:1. This means that the costs and risks of renting a property in Vancouver are often considered not worth it.

They could have a whistle blower reward. Someone is going to find out. Say 20% of the fine goes to the person that reported it.

Having someone keep the house clean and presentable is in itself a laudable goal.

    > When you're throwing two million dollars at a house,
    > sight-unseen, that you then let stand empty for years,

... you're not breaking a sweat paying the $20k.

It sucks, you'd rather keep your $20k, of course. But it's not worth risking cheating it...

Reply on news.ycombinator.com