(Vancouver) An annual surtax on homes over $ 1 million could help limit housing inequalities and moderate market activity, a report says. Paul Kershaw, founder of Generation Squeeze and author of the paper released Wednesday with input from 80 experts, said this was part of a series of recommendations to see housing as a place to live and live rather than a means to get rich.
“As the government has put in place prices on pollution to reduce our carbon emissions and fight climate change, we must have a price on the inequity of housing to slow the soaring prices that erode its affordability,” he said. said Kershaw, associate professor in the School of Population and Public Health at the University of British Columbia.
The report proposes a progressive surtax starting at 0.2% and peaking at 1% on homes valued over $ 1 million. It would be applied annually and would be due upon the sale of the property. Unlike a tax on gains on all sales, it would only affect 9% of the most expensive homes in Canada, Kershaw said.
“A system to the detriment of young Canadians”
A system that makes home ownership an investment strategy undermines affordability and hurts both young and future generations, Kershaw said. Property taxes based on thousandth rates and taxes on speculation have not been sufficient to contain house prices.
The report also recommends adjusting the mandates of the Canada Infrastructure Bank and the Canada Mortgage and Housing Corporation (CMHC) to encourage lending to increase the supply of cooperative and affordable housing.
Housing inequality is a problem across the country, but it is most acute in Ontario and British Columbia. The administration of the proposed tax would make more sense at senior levels of government rather than municipal, Kershaw said.
Federal response
The federal Department of Housing, in partnership with CMHC, said it is working with provinces, territories and local governments on an action plan for equity in real estate, but will not include no equity tax.
“The federal government has clearly stated on several occasions that it will not introduce a tax on the equity of principal residences in Canada,” the ministry said in a press release.
The plan includes a proportional surtax on “excessive” rent increases applied by landlords after renovations as well as an anti-property flip tax and policies to limit excessive profits in investment properties.
“Everyone in Canada deserves a place to call home and we recognize that affordable home ownership has become out of reach for far too many households in Canada,” the statement added.