OTTAWA, ON: The Canadian Taxpayers Federation is sounding the alarm in the wake of a brand-new federally funded study pushing for a surtax on Canadian homes.
“Both the Liberals and Conservatives just spent the last election promising Canadians that they wouldn't hit us with a home equity tax,” said Franco Terrazzano, Federal Director for the Canadian Taxpayers Federation. “Now we find out that the government is using our tax dollars to dream up new ways to tax Canadian homeowners and that’s unacceptable.
“We are not going to tax our way to more homes, you build more homes with hammers, not tax hikes.”
The study was released on Jan. 5 by the University of British Columbia based group Generation Squeeze.
The recommendations in the report include targeting the “housing wealth windfalls gained by many home owners while they sleep and watch TV.”
The report was funded by the federal government’s Canada Mortgage and Housing Corporation. It recommends charging annual surtaxes of 0.2 per cent to 1 per cent on the value of a home beyond a million-dollar threshold. The tax would accumulate until home is sold or inherited.
Even at a rate of 0.5 per cent, an average home in Toronto or Vancouver that’s sold after 10 years of ownership could face a new surtax close to $10,000.
“It’s very easy to be living in a home assessed at more than a million dollars in Vancouver and Toronto, so this is going to hit homeowners and potential home buyers hard” said Kris Sims, B.C. Director for the Canadian Taxpayers Federation. “This could increase the listing prices of homes because this tax will just be tacked on.”
The report estimates this home tax could cost Canadians $5.8 billion per year. That would cover the spending of Prime Minister Justin Trudeau’s government for less than five days. In 2020, it was revealed that CMHC had spent $250,000 on a study that included a consideration of home equity and capital gains taxes on primary homes in Canada.