Whenever I read articles like this it drives me nuts because as someone who invests in real estate locally (and exacerbates the problem but it’s the game we have to play), I can clearly see the reason to the high prices at least locally in Toronto is lack of supply but these idiots want more taxes…
In both markets, single family homes for under $1 million are becoming unheard of, which is why Vancouver based think-tank Generation Squeeze used that figure as a baseline for an eyebrow-raising proposal this week: a new tax on homes worth $1 million and up.
The group is pitching a progressive tax that would kick in on homes valued at more than $1 million, and get progressively larger on homes valued at $3 million and above. The group proposing it runs out of the University of British Columbia, but received some funding from Canada’s federal housing agency the Canada Mortgage and Housing Corporation.
Though the tax would be calculated annually, it would be deferred until the home is sold, so it would function similar to a land transfer tax that many provinces and municipalities already levy.
Later in the article I’m glad they addressed it the real problem.
Not everyone is convinced the plan would be effective, or even workable, however. Ryerson University professor Murtaza Haider is among those who thinks Canada’s housing market is out of whack and in need of fixing, but he doesn’t think adding new taxes on existing owners is the way to do it.
“It’s one of those measures that we call demand-busting measures,” he said in an interview. He says the most effective way to address the imbalance in the market isn’t to try to suppress demand, but rather by building more housing to satisfy that need without encouraging bidding wars for what little housing is available.
“If we don’t address the real problem, that is construction of new housing, and we continue to build or under build, as we have done so in the last five decades, then the problem will remain,” he said.
Suppressing demand doesn’t work, to address the imbalance you need to greatly increase the supply!!!
Toronto & Vancouver rightly or wrongly are surrounded by green belts, no development zones which means the land to build is limited which in turn means homes are a commodity. We can argue whether that should be the case or not but the realities on the ground prove it’s true. Ok if we can’t expand outward then we need further investment upward but not those shoeboxes in the skies, we need actual homes where one could raise a family, 2-3 bedroom units with large living areas and amenities close by. That’d be a start, frankly without opening up the green belt, I don’t know if we can solve the issue of not having enough single family homes but additional taxes or any other demand suppression ideas really only hurts those who want to live in the homes they buy.
For people like me, it’s a cost of doing business unfortunately and that cost will be passed on.
