0.2% annual surtax on homes over $ 1 million could cool housing market: report – National


An annual surtax on homes worth more than $ 1 million could help reduce housing inequalities and cool housing markets, according to a report.

Paul Kershaw, founder of Generation Squeeze and author of the report released Wednesday with input from 80 experts, said this was part of a series of recommendations to change the cultural view of housing as an investment towards housing as that place of life.

“Just as the government has put in place prices on pollution to reduce our carbon emissions to fight climate change, so we need to have a price on housing inequity to slow the soaring house prices that are eroding housing. ‘housing affordability,’ 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 percent and peaking at one percent on homes valued over $ 1 million. It would be applied annually and would be due when the property is sold.

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Unlike a capital gains tax on all home sales, it would only apply to the nine percent of the most expensive homes in Canada, Kershaw said.

The report comes the same week that the British Columbia appraisal authority released annual data showing home values ​​have risen across the province by as much as 50 percent.

The idea is for homeowners to recognize that the system benefits them at the expense of young Canadians, future generations and newcomers of all ages, he said.


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2022 BC Appraisals show significant increase in property values


2022 BC Appraisals show significant increase in property values

Kershaw said property taxes based on thousandth rates don’t go far, and other measures such as speculation taxes have not been enough to bring house prices under control.

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The report also recommends aligning the mandates of the Canada Infrastructure Bank and the Canada Mortgage and Housing Corporation to encourage lending to increase the supply of specially designed co-operative and affordable housing.

Kershaw said housing inequality is a problem across the country, but is most acute in Ontario and British Columbia. The administration of the proposed tax would make more sense at higher levels of government rather than municipalities, he said.

The report was funded with support from the National Housing Strategy Solutions Labs program administered by the Canada Mortgage and Housing Corporation, but the company said in a statement it was not responsible for any opinions or proposals. which were expressed therein.

The federal Department of Housing, in partnership with CMHC, said in a statement that it is working with provinces, territories and local governments on an action plan for equity in real estate, but that it is working with provinces, territories and local governments. will not include 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.

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The plan includes a proportional surtax on “excessive” rent increases applied by landlords after renovations, an anti-rollover tax and policies to limit excessive profits in investment properties.

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“Everyone in Canada deserves a place to call home and we recognize that affordable homeownership has become out of reach for far too many households in Canada,” the release said.

The British Columbia Ministry of Housing has said escalating housing costs are “of concern” and will review the report.

The BC government’s housing plan includes tackling tax evasion, a tax on vacant homes and the construction of tens of thousands of new homes, he says.

The Ontario Ministry of Finance said in a statement it is tackling affordability with a non-resident speculation tax that has reduced foreign investor activity in the Greater Toronto Area. and Hamilton from 4.7% of transactions to less than 2%.

Last month, the government proposed increasing the tax from 15 percent to 20 percent and expanding it to cover the entire province.

“By expanding the catchment area to include the entire province and increasing the tax, we will discourage foreign speculation and ensure that our limited supply of housing goes to those who need it most,” the ministry said in a statement. .


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How inflation could impact the housing market in 2022


How inflation could impact the housing market in 2022 – December 15, 2021

The Real Estate Board of Greater Vancouver said in a press release that changing housing needs during the pandemic boosted a record home sales in Metro Vancouver last year.

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Sales in 2021 increased 42.2% to 43,999 from 30,944 the previous year. The previous record was set in 2015.

Keith Stewart, the council’s economist, said residents of Metro Vancouver have assessed their housing needs and options in record numbers in recent years.

“The house has been a central concern of residents throughout the pandemic.”

Supply chain issues have also increased the cost of construction and created delays, according to the Independent Contractors and Businesses Association.

President Chris Gardner said in a statement that contractors face delays and challenges in securing supplies that have not been seen in decades.

“At a time when housing and construction costs continue to rise in seemingly uncontrolled fashion, supply chain constraints are another key factor putting pressure on the affordability of the British Columbia market. . “

© 2022 The Canadian Press


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