Canada's 'housing bubble' deemed close to bursting

[theman23]

A land value tax would be federally or provincially administered if it was going to offset income taxes. As it stands, most of the personal wealth in this country has been generated by real estate appreciation and this hasn't been adequately captured by taxation whereas income earners have seen relatively modest gains and continue to carry most of the taxation burden. Not an economist, but perhaps that's part of why we have such low productivity in this country - people leaving the workforce early because their real estate gains dwarf their incomes.

[someone123]

We don't talk about basic economic questions like "what happens when you shovel massive amounts of cash into an economy?", "what happens to investment when you set the tax rate of one asset class to 0%?", or "what happens to the labour supply from the most productive workers when you raise marginal combined income and consumption tax rates up into the 65-70% ballpark?'.

[Truenorth00]

Originally Posted by Xelebes

Problem is that most landowners already pay a land value tax. It's called property taxes.

Property tax is not land value tax. If it was, condos would be taxed a lot less. Property tax is based on property values. Not land values.

[someone123]

Originally Posted by Truenorth00

Property tax is not land value tax. If it was, condos would be taxed a lot less. Property tax is based on property values. Not land values.

True although around here the bill is broken into land and improvements and even in a condo the improvement portion is surprisingly small. However, while it can be 3:1 or 2:1 the improvement value for old houses or empty lots can be ~0.

[LightingGuy]

A capital gains tax on personal real estate sales makes more sense.

[someone123]

It depends on what you are trying to solve. There is the tax burden question but there's also the issue of people occupying valuable land. Under the capital gains scenario you can hold onto a weedy lot in a downtown area for 50 years with no financial impact.

One the political issue with a more significant land tax is that it makes property rights feel a bit murkier. It feels more like "renting" something people think they "own". Of course, a bad actor government can always take your property away.

[swimmer_spe]

Originally Posted by Xelebes

Problem is that most landowners already pay a land value tax. It's called property taxes.

What if the value was not based on what is on it, but what could be on it. This would be especially relevant in areas where there are pockets of vacant land.

[Xelebes]

Originally Posted by swimmer_spe

What if the value was not based on what is on it, but what could be on it. This would be especially relevant in areas where there are pockets of vacant land.

My largest problem with it is that any new taxes would be a fart in the wind. We need new housing supply and a new tax would mean a new means test (if you take the soc-dem understanding of tax.) We need less means testing and more actual producing new means.

[swimmer_spe]

Originally Posted by Xelebes

My largest problem with it is that any new taxes would be a fart in the wind. We need new housing supply and a new tax would mean a new means test (if you take the soc-dem understanding of tax.) We need less means testing and more actual producing new means.

If that additional tax was waived while construction was happening, and there was a deadline for the construction to conclude, it might be a good incentive.

[Xelebes]

Originally Posted by swimmer_spe

If that additional tax was waived while construction was happening, and there was a deadline for the construction to conclude, it might be a good incentive.

I still see it as counterproductive until we actually get the construction broadly going.

That is, with our current problem: we need to build and we need to deliver it to residents. Taxing isn't doing anything if we don't build what we already have in the pipe.

[WarrenC12]

Originally Posted by theman23

A land value tax would be federally or provincially administered if it was going to offset income taxes. As it stands, most of the personal wealth in this country has been generated by real estate appreciation and this hasn't been adequately captured by taxation whereas income earners have seen relatively modest gains and continue to carry most of the taxation burden. Not an economist, but perhaps that's part of why we have such low productivity in this country - people leaving the workforce early because their real estate gains dwarf their incomes.

Yep that all makes sense.

BC has already enacted a school surtax on high value properties:

"The additional school tax rate does not apply to non-stratified rental buildings with four or more housing units, such as apartment buildings. For mixed-use properties, the additional school tax rate applies to only the residential portion of the property that has an assessed value above $3 million.

The additional tax rate is:

0.2% on the residential portion assessed between $3 million and $4 million
0.4% on the residential portion assessed over $4 million"

They just need to increase that and drop it to lower levels of valuation. FYI this already pulls in ~200M/year.

[swimmer_spe]

Originally Posted by Xelebes

I still see it as counterproductive until we actually get the construction broadly going.

That is, with our current problem: we need to build and we need to deliver it to residents. Taxing isn't doing anything if we don't build what we already have in the pipe.

Why is what already is in the pipe taking so long then? Fix that.

[whatnext]

Originally Posted by Xelebes

I still see it as counterproductive until we actually get the construction broadly going.

That is, with our current problem: we need to build and we need to deliver it to residents. Taxing isn't doing anything if we don't build what we already have in the pipe.

Get construction going? In Vancouver we have developers looking for, and being given handouts for delays. And yet our NDP gov't insists that if they just override local zoning powers developers will flood the market with units. Aside from proving once again that the NDP everywhere has no clue about how businesses operate, it won't work.

Handouts:

ABC Vancouver gives developers $3.8M tax break

Major developer asks to delay $10 million payment to Vancouver city hall

[Xelebes]

Originally Posted by swimmer_spe

Why is what already is in the pipe taking so long then? Fix that.

That's what I've been trying to point out in the last several pages. Biggest problem is that the construction industry has not seen substantial productivity gains for the last fifty-plus years. And it is causing construction projects to go over budget, which results in reticence towards financing these projects.

[Xelebes]

Originally Posted by whatnext

Get construction going? In Vancouver we have developers looking for, and being given handouts for delays. And yet our NDP gov't insists that if they just override local zoning powers developers will flood the market with units. Aside from proving once again that the NDP everywhere has no clue about hos businesses operate, it won't work.

Handouts:

ABC Vancouver gives developers $3.8M tax break

Major developer asks to delay $10 million payment to Vancouver city hall

I think everyone is flailing their arms about. I'm thinking it's going to require some comprehensive reforms at the federal and provincial level. I think there is a vexatious demand that with climate change weighing on our minds, we have to think of keeping productivity down and that's. . . just not going to put people under roofs.

[chowhou]

I just want to jump in and say: I too support a LVT!

At the very least, we should adopt the Pennsylvania split rate model and tax land and structures at a different rate. We already assess land and structures (in BC at least), we should use that.

[whatnext]

Originally Posted by Xelebes

I think everyone is flailing their arms about. I'm thinking it's going to require some comprehensive reforms at the federal and provincial level. I think there is a vexatious demand that with climate change weighing on our minds, we have to think of keeping productivity down and that's. . . just not going to put people under roofs.

Yep. As I’ve said before I don’t know why the Federal Liberals haven’t brought back the MURBS that led to so many rental units being built in the Seventies and early Eighties. Start with that and if it doesn’t work they should work with other levels of gov’t to go full Vienna Model.

[swimmer_spe]

Originally Posted by chowhou

I just want to jump in and say: I too support a LVT!

At the very least, we should adopt the Pennsylvania split rate model and tax land and structures at a different rate. We already assess land and structures (in BC at least), we should use that.

Can you explain it?

[ssiguy]

Originally Posted by LightingGuy

I know you're talking about real estate, but if this happens we will see a flood of money leave the country.

Not necessarily, it all depends on how the tax is administered. Back in the day, one's wealth was usually dependent upon savings, stocks etc but today the VAST majority of wealth is centered upon real estate. That is very easy to tax using a luxury tax.

Give people {family units and not just individuals} a 6 month warning on the tax and then bring the rate in at 50% on all secondary homes over $2 million as well as any company that owns residential land or property obviously excepting actual apt management/owner companies. A 10% sales tax would remain for all primary residences over $2 million. This would cause a flood of new homes entering the market immediately and at much reduced prices as people desperately try to sell secondary homes before the tax kicks in. The effect on lowering prices would be instantaneous.

It would also greatly help the rental market as these hundreds of thousands of homes come onto the market at greatly reduced prices meaning that the middle class who cannot afford to currently buy will be able to do so and hence leaving their current rentals freeing up thousands of rentals for those who need rental options. As the rental market sees vacancy rates soar, rates will come down.

[Wigs]

The Milton-ization of Niagara continues
3,800 unit subdivision to start construction in 2026 in Welland





https://www.wellandtribune.ca/news/counc...e22c2d0-5531-5c7b-9266-b867ccf66182.html