Prime Minister Mark Carney signed a symbolic order signalling his government will prioritize passing his promised middle-class tax cut, following the first in-person meeting of his cabinet on Parliament Hill Wednesday.
I’ll repeat again, I don’t need a fucking tax cut. I need the price of housing to start going down.
Increase taxes on property significantly, and use 100% of that money to give everyone a basic income.
This incentivizes both people and developers to be efficient with their housing choices. Using too much housing for the area you live in? You pay extra to help out everyone. Using the right amount? No harm to you. Using less than the average? Here’s a payout, thank you.
Prices overall will drop, because it’s no longer profitable to simply own a home due to the taxes, and especially not if there’s no people in it because the taxes won’t be offset by the basic income.
He’s also planning to start a big government-driven building program at some point.
I don’t expect this guy is going to do a basic income. That’s a radical policy that’s not really on-brand for him, and we have some crises going on that need the political oxygen.
A) It prevents renting at all except for basement suites. So no more rental buildings, which make up the majority of rentals available. Renting is an important housing option, as not everyone wants to own, nor should they have to. Move to a city to go to university, and you have to buy a house just to live in for 2-4 years before you have to sell it to move elsewhere for a job? Have a job that requires you go somewhere else for a few months while you <build a bridge> <implement a new computer system> <train some people>, too bad hotel for 6 months instead of being able to rent an apartment.
B) If you do the math and even take out dedicated rental buildings, there really aren’t that many homes that are owned as a second place. It’s about 15% of the total market, and a large chunk of that are cottages and lake houses away from the cities where people actually want to live.
The big place/small place issue is actually more of a problem than the the double ownership you’re talking about. There are more total bedrooms in Canada than there are people, and once you account for couples usually sharing a bedroom, there’s actually a ton of extra bedrooms across the country. The problem is that they’re not distributed properly across the population, 4+ bedroom family homes that were bought to raise children are being kept for decades by empty-nest couples who don’t want to downsize.
That’s true, rentals are important. So how about instead mom and pop landlords can rent a couple/small number of units, but anything above that you must register as a corporation and the tenants union gets to be on the board, and there are strong incentives to turn you into a housing cooperative. Let’s throw in some more tenant protection legislation for good measure.
Basically, treat housing as a right, not as a financial asset, an investment, or a profit-driven enterprise.
I agree with you on the second part, but even allowing a single home still keeps housing as an investment/profit generator.
You have to actually do something to force every owner to lose(or at least never make) money. Hence my original suggestion to heavily tax homes and return that to citizens equally.
All they need to do is make it so you can only own one residence, if you own a second as income property it should be taxed to the point that you want to sell it.
I was in the rental stream before and at least 1 landlord was foreign owners from mainland China–the property had sat empty for six months before us because owner was rich and didn’t care about the 2k month they were losing. Another was an unlocatable landlord, the strara paperwork showed China owner, but correspondence was coming from Korean contact info. It started to look more like shell company ownership.
Also have two friends who’s Vancouver places are Asian owned. Owners moved back to China and main house was vacant for 2+ years, just single basement tennant paying utilities to make place “occupied”.
I ran the calculations a while back, that may free up 2-4% of all housing, that is not enough to fix the problem of expensive housing. That’s only 1-2 years of new building stock.
It won’t hurt to do it, but it’s simply not the main reason real estate is expensive.
As someone who’s trying to move back to Canada, I’m also reading that a lot of the places owned by these investors are basically useless boxes that no local would live in. So even if they got freed up, there’d be very little demand for them.
We definitely need more housing across canada, but BC has been notorious for vacant homes and airbnb units, thus the ban on airbnb and the added vacancy tax out here.
And it should be obvious that despite new regulations being put in for Foreign buyers, Vacant units, and Airbnb, the prices haven’t dropped to even pre-pandemic levels, let alone any useful amount, and they’re expected to keep climbing this year.
These are all small red herrings that are easy PR wins for the government, but don’t actually do anything useful to the prices.
They did drop for us in Vancouver. I’m not suggesting it accounts for the high prices everywhere but it definetly had a market affect as airbnb people dumped their additional units. One owner had over 40
and yet if you go look at the charts for say Vancouver and Toronto over the same period of time you can clearly see there’s little to no effect from BC’s policy changes.
And it’s still a couple million dollars to buy a detached home in Vancouver, and the cheapest 2 bedroom condo is a half million (and it’s literally on East Hastings) with most normal 2 bedrooms being listed at $600-700k
These policies haven’t made anything affordable, and they aren’t going to make things affordable.
There’s an idea I hadn’t thought of before. I wonder if there’s any studies out there about how much space a single person needs to be comfortable. And how that’d change base on how many others are in the same space. Could be interesting idea to tax people based on their space to people ratio 🤔
There are studies on that, but they’re not super relevant because the appropriate amount of space is determined by how many people want to live somewhere, not based on the specific size.
People are willing to live in smaller places the closer they are to amenities. It’s a gradient, not a single value even for each location.
The problem I have with the space tax idea, which I think OP has mentioned before, is just that it presupposes what people need without much justification, and then applies a penalty to force that outcome. Really, you only want to make people pay for what they take, and people buying big houses definitely do that. (Having inequality in the first place is of course it’s own issue)
For sure, a thorough study of what Canadians need would be helpful to something like this. Could inform what a good space to person ratio could be. Especially in Canada.
If I’m understanding this correctly, you wouldn’t need to adjust any taxes based on occupancy. The property tax would be fixed based on the value, as it is now but higher. If a single person lived in a big house the new guaranteed income might be less than the tax increase, if you added a second person you’d double the income and potentially cancel out the increase. If you had a family of four in that same house, you’d potentially pay no taxes at all or even get some back.
Maybe not no taxes, but less? Could be an interesting way to tackle low occupancy rates. If it’s possible to pay no taxes at all, it might cause people to sardine can a house to save on $.
I see where you’re coming from, but I can’t really see how that outcome would be any more or less common than it would be currently. I suppose I should’ve said effectively no tax, as it would simply be the new combined income being higher than the total property tax.
Some quick hypothetical math:
For illustrative purposes we can pretend every house is worth the same amount so we can deal simply with averages. At the same time we’ll round the average household to 2.5 people. Let’s say every house currently pays $5000/yr in property tax and that gets doubled, then we distribute the total evenly between every person in the country. We should end up with every individual person getting $2000/yr. If your household is 2 people, you’d effectively pay $6000, if your household is 5, you’d pay $0.
In the real world values obviously differ, but it would theoretically lower taxes on full houses and raise taxes on underutilized houses, with the impacts felt much less on small single occupancy houses and much more on huge mansions occupied by a small family.
I’m no expert, I’m simply a normal guy taking someone else’s commented idea and running with it, so I’m sure there would be issues. In fact I see one already. This sort of sounds like how the carbon tax was supposed to work, where the average consumer breaks even, but in reality people in more rural areas felt like they were being punished because they didn’t have realistic options to cut down on their fuel usage. This housing idea would have a similar issue where people in the least affordable cities would feel punished, because their shoebox sized studio might cost as much as a house fit for a multi generational family in a different province.
The trick to make this work is to tax the land value, rather than the property as a whole.
Rural area, land not worth a lot, fairly low tax. My rural property that I live in is about 20% land value, and 80% house value.
Downtown core, land worth a lot, but then it gets divided by all the apartments in that building bringing it to a very low number. So you have a 40 million dollar plot of land, but there’s 100 condos on it, which makes the land value about the same as above in terms of a percentage vs building value.
It’s underutilized land that gets absolutely slammed. That empty nest couple who kept the 5 bedroom family home that’s now inside the city boundaries and refuse to sell to let it be developed into condos. The 2-3 floor condo that was built 60 years ago right downtown, but really needs to be 10-15 floors at this point. Or the 1 story business in the core, sitting on a primary bus route or next to a bus exchange, that needs to be a condo building with commercial space on the bottom.
Tying immigration to housing completions. Forcing rezoning around mass transit. Withholding federal money from areas that dont build enough housing, due to bureaucracy and high developer taxes. Removing GST was his idea as well.
I’ll repeat again, I don’t need a fucking tax cut. I need the price of housing to start going down.
Increase taxes on property significantly, and use 100% of that money to give everyone a basic income.
This incentivizes both people and developers to be efficient with their housing choices. Using too much housing for the area you live in? You pay extra to help out everyone. Using the right amount? No harm to you. Using less than the average? Here’s a payout, thank you.
Prices overall will drop, because it’s no longer profitable to simply own a home due to the taxes, and especially not if there’s no people in it because the taxes won’t be offset by the basic income.
He’s also planning to start a big government-driven building program at some point.
I don’t expect this guy is going to do a basic income. That’s a radical policy that’s not really on-brand for him, and we have some crises going on that need the political oxygen.
I have a much more clear cut policy:
Occasionally someone has a big place and someone has a small place, but this would solve way more issues.
It really wouldn’t.
A) It prevents renting at all except for basement suites. So no more rental buildings, which make up the majority of rentals available. Renting is an important housing option, as not everyone wants to own, nor should they have to. Move to a city to go to university, and you have to buy a house just to live in for 2-4 years before you have to sell it to move elsewhere for a job? Have a job that requires you go somewhere else for a few months while you <build a bridge> <implement a new computer system> <train some people>, too bad hotel for 6 months instead of being able to rent an apartment.
B) If you do the math and even take out dedicated rental buildings, there really aren’t that many homes that are owned as a second place. It’s about 15% of the total market, and a large chunk of that are cottages and lake houses away from the cities where people actually want to live.
The big place/small place issue is actually more of a problem than the the double ownership you’re talking about. There are more total bedrooms in Canada than there are people, and once you account for couples usually sharing a bedroom, there’s actually a ton of extra bedrooms across the country. The problem is that they’re not distributed properly across the population, 4+ bedroom family homes that were bought to raise children are being kept for decades by empty-nest couples who don’t want to downsize.
That’s true, rentals are important. So how about instead mom and pop landlords can rent a couple/small number of units, but anything above that you must register as a corporation and the tenants union gets to be on the board, and there are strong incentives to turn you into a housing cooperative. Let’s throw in some more tenant protection legislation for good measure.
Basically, treat housing as a right, not as a financial asset, an investment, or a profit-driven enterprise.
I agree with you on the second part, but even allowing a single home still keeps housing as an investment/profit generator.
You have to actually do something to force every owner to lose(or at least never make) money. Hence my original suggestion to heavily tax homes and return that to citizens equally.
Yes but what about the profits of investors? Have you thought of them? You meany.
All they need to do is make it so you can only own one residence, if you own a second as income property it should be taxed to the point that you want to sell it.
I was in the rental stream before and at least 1 landlord was foreign owners from mainland China–the property had sat empty for six months before us because owner was rich and didn’t care about the 2k month they were losing. Another was an unlocatable landlord, the strara paperwork showed China owner, but correspondence was coming from Korean contact info. It started to look more like shell company ownership. Also have two friends who’s Vancouver places are Asian owned. Owners moved back to China and main house was vacant for 2+ years, just single basement tennant paying utilities to make place “occupied”.
This is a red herring.
I ran the calculations a while back, that may free up 2-4% of all housing, that is not enough to fix the problem of expensive housing. That’s only 1-2 years of new building stock.
It won’t hurt to do it, but it’s simply not the main reason real estate is expensive.
As someone who’s trying to move back to Canada, I’m also reading that a lot of the places owned by these investors are basically useless boxes that no local would live in. So even if they got freed up, there’d be very little demand for them.
We definitely need more housing across canada, but BC has been notorious for vacant homes and airbnb units, thus the ban on airbnb and the added vacancy tax out here.
And thus many of those buyers moved to other Canadian cities and did the same thing as Vancouver.
And it should be obvious that despite new regulations being put in for Foreign buyers, Vacant units, and Airbnb, the prices haven’t dropped to even pre-pandemic levels, let alone any useful amount, and they’re expected to keep climbing this year.
These are all small red herrings that are easy PR wins for the government, but don’t actually do anything useful to the prices.
They did drop for us in Vancouver. I’m not suggesting it accounts for the high prices everywhere but it definetly had a market affect as airbnb people dumped their additional units. One owner had over 40
Or it just happened to coincide with a massive jump in interest rates which also affected prices elsewhere that didn’t implement these policies.
No there are articles about the affect upon announcement and then institution
and yet if you go look at the charts for say Vancouver and Toronto over the same period of time you can clearly see there’s little to no effect from BC’s policy changes.
And it’s still a couple million dollars to buy a detached home in Vancouver, and the cheapest 2 bedroom condo is a half million (and it’s literally on East Hastings) with most normal 2 bedrooms being listed at $600-700k
These policies haven’t made anything affordable, and they aren’t going to make things affordable.
There’s an idea I hadn’t thought of before. I wonder if there’s any studies out there about how much space a single person needs to be comfortable. And how that’d change base on how many others are in the same space. Could be interesting idea to tax people based on their space to people ratio 🤔
There are studies on that, but they’re not super relevant because the appropriate amount of space is determined by how many people want to live somewhere, not based on the specific size.
People are willing to live in smaller places the closer they are to amenities. It’s a gradient, not a single value even for each location.
For sure, definitely an interesting way to think of property taxes and how to encourage people to not have frivolous space.
Average square footage of homes:
https://www.newser.com/story/225645/average-size-of-us-homes-decade-by-decade.html
Man, WWII sure happened.
Yup. All that post-war housing built for returning military had an effect on house sizes.
Culturally dependent, I’m pretty sure. Housing in Japan can be pretty tiny. Canada’s on the large side.
It also depends on the person and their habits: introverts and people who spend more time at home are likely to want more personal space.
Personality and lifestyle dependent, too.
The problem I have with the space tax idea, which I think OP has mentioned before, is just that it presupposes what people need without much justification, and then applies a penalty to force that outcome. Really, you only want to make people pay for what they take, and people buying big houses definitely do that. (Having inequality in the first place is of course it’s own issue)
For sure, a thorough study of what Canadians need would be helpful to something like this. Could inform what a good space to person ratio could be. Especially in Canada.
If I’m understanding this correctly, you wouldn’t need to adjust any taxes based on occupancy. The property tax would be fixed based on the value, as it is now but higher. If a single person lived in a big house the new guaranteed income might be less than the tax increase, if you added a second person you’d double the income and potentially cancel out the increase. If you had a family of four in that same house, you’d potentially pay no taxes at all or even get some back.
Maybe not no taxes, but less? Could be an interesting way to tackle low occupancy rates. If it’s possible to pay no taxes at all, it might cause people to sardine can a house to save on $.
I see where you’re coming from, but I can’t really see how that outcome would be any more or less common than it would be currently. I suppose I should’ve said effectively no tax, as it would simply be the new combined income being higher than the total property tax.
Some quick hypothetical math:
For illustrative purposes we can pretend every house is worth the same amount so we can deal simply with averages. At the same time we’ll round the average household to 2.5 people. Let’s say every house currently pays $5000/yr in property tax and that gets doubled, then we distribute the total evenly between every person in the country. We should end up with every individual person getting $2000/yr. If your household is 2 people, you’d effectively pay $6000, if your household is 5, you’d pay $0.
In the real world values obviously differ, but it would theoretically lower taxes on full houses and raise taxes on underutilized houses, with the impacts felt much less on small single occupancy houses and much more on huge mansions occupied by a small family.
I’m no expert, I’m simply a normal guy taking someone else’s commented idea and running with it, so I’m sure there would be issues. In fact I see one already. This sort of sounds like how the carbon tax was supposed to work, where the average consumer breaks even, but in reality people in more rural areas felt like they were being punished because they didn’t have realistic options to cut down on their fuel usage. This housing idea would have a similar issue where people in the least affordable cities would feel punished, because their shoebox sized studio might cost as much as a house fit for a multi generational family in a different province.
The trick to make this work is to tax the land value, rather than the property as a whole.
Rural area, land not worth a lot, fairly low tax. My rural property that I live in is about 20% land value, and 80% house value. Downtown core, land worth a lot, but then it gets divided by all the apartments in that building bringing it to a very low number. So you have a 40 million dollar plot of land, but there’s 100 condos on it, which makes the land value about the same as above in terms of a percentage vs building value.
It’s underutilized land that gets absolutely slammed. That empty nest couple who kept the 5 bedroom family home that’s now inside the city boundaries and refuse to sell to let it be developed into condos. The 2-3 floor condo that was built 60 years ago right downtown, but really needs to be 10-15 floors at this point. Or the 1 story business in the core, sitting on a primary bus route or next to a bus exchange, that needs to be a condo building with commercial space on the bottom.
Carneys housing minister said he doesn’t want prices to fall.
Congrats, you voted Liberal. The party of debt and future austerity, and importing people to hide falling GDP and to prop up home values.
No party wants prices to fall because the economy is so built around ever-increasing prices that if prices do fall then the economy falls with it.
What was the conservative plan again?
Tying immigration to housing completions. Forcing rezoning around mass transit. Withholding federal money from areas that dont build enough housing, due to bureaucracy and high developer taxes. Removing GST was his idea as well.
https://www.conservative.ca/poilievre-will-build-2-3-million-homes-in-five-years/
Instead we got a guy who says he doesnt want prices to fall.
I didn’t vote liberal.
I voted NDP, but even they didn’t have a plan to actually drop housing prices.