From CGORWA: Remember… Windfalls and capital gains all derive from land value, the unearned increment of real estate. Dampen housing price inflation by shifting property taxes off building values onto land values!
News From B.C. Canada: Proposals to Tax Land Speculation
Housing affordability is a ‘huge driver’ in the upcoming provincial election, May 9. An April opinion poll suggests the majority of voters are unhappy with the B.C. Liberals handling of unaffordable housing costs. Housing prices in Vancouver jumped by more than 40 per cent in a single year, and detached homes now fetch well over $1-million.
“Housing is a necessity, not a luxury”. This is an opportunity for the NDP, if they have a credible plan.
A ‘radical tax shift could cool the market’, says U. of Missouri economist Michael Hudson in a speech to Vancouver residents on 11 April. “Who is going to benefit from rising housing prices, the people of Vancouver or real-estate developers and banks?” “When housing prices rise, all that windfall ends up getting paid to banks as mortgage interest. This is not a natural law; it is the result of bad tax policies. All these windfall gains could be taxed, and that would keep housing prices down.”
Back in 1974 Ontario brought in a land speculation tax as an effort to discourage the flipping of properties, but the realtors managed to get it scuttled.
The current B.C. election is going to be a tight contest; the NDP and the Greens are gaining in the polls. Just last week the NDP revealed its party’s platform, reviving the speculation tax.
B.C.’s New Democrats are promising to impose a 2 percent annual tax on property speculators who don’t pay income tax in the province, which the party says will be more effective than a levy on foreign buyers introduced last year by Christy Clark’s Liberal government. The party says the tax would raise $200-million – a projection linked to a study by the University of British Columbia Sauder School of Business. The tax would be based on assessed property values and proceeds would go to a housing affordability fund.
The B.C. Green Party unveiled its platform on April 11. It is proposing to tax capital gains on home sales, and implement a 12 percent transfer tax on properties valued above $3 million. The Greens suggest that when a seller’s lifetime capital gains reach in excess of $750,000, that profit should be taxed.
