VANCOUVER - Vancouver will find a way to tax its vacant homes, possibly by treating them as business investments, in order to ease the Canadian city's housing affordability crisis, Mayor Gregor Robertson said on Wednesday.

If implemented, the tax could drive up costs for many foreign investors who have helped make the west coast city Canada's most expensive property market.

Robertson said the city will give the British Columbia government until Aug. 1 to respond to its plan to tax nearly 11,000 empty homes in Vancouver, or go it alone.

If Vancouver fails to win provincial backing, Robertson said, the city would begin drafting its own regulations to create a business tax on empty homes that are held as  investments. 

"We are going to make sure that those who treat housing as a business are treated and taxed accordingly for that use," Robertson told reporters.

A tax rate has not yet been decided, but it needs to be high enough that there is an incentive for owners to rent their homes, Robertson said, adding that vacancy rates in Vancouver are close to zero.

Robertson said the city's preferred option is to work with the province, which already has data on whether properties are vacant. If it goes it alone, the city would also have to enact a new business tax by-law, something that could take time and be expensive to administer and enforce.

In a tweet, British Columbia Premier Christy Clark said the province was reviewing the city's report and would respond quickly.

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A spokesman for the provincial finance ministry, Jamie Edwardson, said last week that the province was studying a number of different proposals to cool off the red-hot housing market.

More than 90 per cent of detached homes in Vancouver are now worth more than $1 million, compared with just 19 per cent a decade ago, a study released last week found.

In the Greater Vancouver region, home prices have risen 46.9 percent in the last five years. Despite this stratospheric rise, the province has been hesitant to intervene, only recently taking small steps to start tracking foreign buyers and to slow aggressive flipping activity.