{"id":480826,"date":"2022-08-03T16:40:51","date_gmt":"2022-08-03T13:40:51","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/why-we-need-to-tax-million-dollar-home-owners\/"},"modified":"2022-08-03T16:40:51","modified_gmt":"2022-08-03T13:40:51","slug":"why-we-need-to-tax-million-dollar-home-owners","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/why-we-need-to-tax-million-dollar-home-owners\/","title":{"rendered":"#Why we need to tax million-dollar-home owners"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3aa30d030dd\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3aa30d030dd\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/why-we-need-to-tax-million-dollar-home-owners\/#%E2%80%9CWhy_we_need_to_tax_million-dollar-home_owners%E2%80%9D\" >&#8220;Why we need to tax million-dollar-home owners&#8221;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CWhy_we_need_to_tax_million-dollar-home_owners%E2%80%9D\"><\/span>&#8220;Why we need to tax million-dollar-home owners&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n                            To tackle the scourge of housing unaffordability, older, wealthier homeowners need to chip in\n                        <\/div>\n<div>\n<p class=\"p1\"><span class=\"s1\"><em>Paul Kershaw<\/em><i> is a policy professor at the UBC School of Population and Public Health. He is the founder of Generation Squeeze, a think tank that promotes well-being and fairness for Canadians of all ages.<\/i><\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I\u2019m 47 years old now,<\/span> but I started the \u201cthink and change tank\u201d Generation Squeeze when I was 36. Its mandate was to tackle generational unfairness, and one of the first areas I looked at was, unsurprisingly, housing. I got into the Metro Vancouver property market in 2004\u2014well before many millennials. I bought a single-family detached home for $540,000, and my mortgage still sits at well over $400,000 even though I\u2019ve been paying it down for 18 years. That said, since buying, I\u2019ve made more than a million dollars in equity. My partner and I have been able to do quite a few renos\u2014and even some additional investing\u2014in large part because of the financial gains we\u2019ve made from the home. At one point, our place had tons of leaks and a shaky foundation, but now it\u2019s pretty charming.<\/p>\n<p class=\"p1\">Baby boomers got their start in a more propitious time than me, but I\u2019m still a poster boy for the good-timing lottery, especially when it comes to entering the housing <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>. There are so many young people out there who are just as smart as me\u2014and just as hard-working as me\u2014who can no longer buy in. Some of Generation Squeeze\u2019s recent research revealed that it could take millennials decades longer than it took the Boomers to afford homes in Canada\u2019s biggest cities. Why on earth are we tolerating this?<\/p>\n<p class=\"p1\">One of the best ways to challenge this epidemic of unaffordability is by targeting the country\u2019s tax policy. People talk about housing inflation like it\u2019s a bad thing for everyone, but it\u2019s making a lot of owners rich\u2014and many of those gains aren\u2019t subject to taxation. In fact, our tax system has sheltered much of the $3.2 trillion in added housing wealth that homeowners have pocketed since 1977. At the same time, younger demographics are contending with home prices that rapidly outpace their earnings, and competing for scarce rentals with rising rents.<\/p>\n<blockquote><p><strong>MORE: Are garden suites part of the housing crisis solution?<\/strong><\/p>\n<\/blockquote>\n<p class=\"p2\"><span class=\"s2\">Our suggestion is to put a price on hous<\/span>ing inequality\u2014specifically, a modest annual surtax on homes valued above one million dollars. This isn\u2019t a totally scary idea; most of us already pay property taxes. What\u2019s different about our idea is progressivity. For the 12 per cent of Canadians whose principal residences are valued at over one million dollars, we\u2019re proposing a small tax\u2014a gentle squeeze\u2014starting at 0.2 per cent and peaking at 1 per cent for homes valued at $2 million and above. Owners would pay no tax on the first million. If you own a $1.1-million home, frankly, it\u2019s negligible: you\u2019d pay $200 a year. It could even be deferred, with a bit of added interest, until the home is sold or inherited. We realize that some people are house-rich but cash-poor, and we want to avoid putting any additional financial pressure on those owners. In reality, this surtax wouldn\u2019t touch most Canadians.<\/p>\n<p class=\"p2\">According to our calculations, this tax would raise about $5 billion per year across Canada\u2014primarily in Ontario and British Columbia, where home prices have been most inflated and, by extension, generated the most wealth for owners. And what should government do with the surtax money? We want it to be funnelled into purpose-built rentals and co-operative housing\u2014or \u201cnon-profit housing.\u201d Groups like the BC Non-Profit Housing Association <span class=\"s2\">or the Co-Operative Housing Federation <\/span><span class=\"s3\">of Canada already have plans for how to scale up housing that is geared to a person\u2019s<\/span><span class=\"s2\"> earnings. The city of Vancouver has a housing plan for different income brackets, too. These groups possess a lot <\/span>of expertise; what they\u2019re lacking is resources.<span class=\"s2\"> Our proposal would develop these resources for them, generating revenue that could subsidize developers who work with non-profit housing providers so that more proper<\/span>ties are sold at reasonable prices. We es<span class=\"s2\">timate that our $5-billion idea could fund 150,000 new homes in the course of one election cycle and build on that amount every year thereafter.<\/span><\/p>\n<p class=\"p2\">One of the biggest stumbling blocks to progress is Canadian real estate culture, which entices many of us to bank on rising home prices to bolster our savings. Our existing tax structure only encourages this mentality. The average Canadian is more heavily taxed on their employment income than million-dollar-home owners are on the sizable gains they make while watching <span class=\"s2\">TV. (Even the United States, our closest neighbour, doesn\u2019t shelter homeownership gains from taxation to the extent that Canada does.) This incentivizes many Canadians to want housing prices to increase substantially faster than earnings, which erodes affordability for the generations that follow. <span class=\"Apple-converted-space\">\u00a0<\/span><\/span><\/p>\n<p class=\"p2\">Our collective addiction to rising real estate prices also distracts from the generational tension at play in our hous<span class=\"s2\">ing system. Take the myth of the lazy mil<\/span>lennial. If only they worked harder! If only they had fewer cell phones and lattes and less expensive breakfasts! Now contrast that with the myth of the vulnerable senior. That fragility might be real in a biological sense, but according to recent data from Statistics Canada, today\u2019s retirees are some of the wealthiest we have ever seen\u2014and a great deal of their wealth came from housing. No one is saying older people didn\u2019t work hard; we\u2019re just saying hard work doesn\u2019t pay off now as much as it did when they were young. We\u2019re asking that more affluent members of the oldest demographics invest in affordable shelter for their kids and grandkids.<\/p>\n<p class=\"p2\"><span class=\"s3\">I\u2019m a policy scholar by training, but, to me, housing is no longer solely a policy issue in Canada\u2014even if our idea zeroes in on that. What we really have is a high tolerance for generational inequities. The surtax solution requires the Canadian government to double down on intergenerational solidarity, and make housing, taxation and other regulatory measures work for everyone\u2014no matter what their age.<\/span><\/p>\n<p class=\"p2\"><span class=\"s3\">Our polling data shows that two-thirds of Canadians support the surtax, but <\/span>you\u2019d be shocked to hear how much resistance I\u2019ve received during the course of my career. I\u2019ve even created an email folder exclusively for angry notes. <span class=\"s2\">What keeps me motivated are the stories I\u2019ve heard from young people whose futures have been jeopardized because the current housing market is stacked against them. I\u2019ve spoken to women in their 20s who want to have babies, but real estate prices are interfering with their ability to start a family. I hear from children of immigrants who say, \u201cMy parents sacrificed so much to come to Canada, and I\u2019m not living up to the dream they had for me.\u201d All I can tell them is that the game is rigged.<\/span><\/p>\n<p class=\"p2\">We can\u2019t maintain a housing market that locks out younger people, while others gain wealth as they sleep in homes they bought decades ago. Our surtax can help to stall this runaway train. We need all Canadians to decide that housing should be about finding a place to call home\u2014more than we want it to be a way to get rich. Building <span class=\"s2\">financial security by paying off your mortgage over time is a perfectly fine sav<\/span>ings strategy. But we shouldn\u2019t accept <span class=\"s3\">what our current housing system is en<\/span>abling: one-year windfalls that far surpass what a hard-working, decently paid young person can save in a decade. That model only works for one generation.<\/p>\n<hr\/>\n<p><em>This article <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ears in print in the August 2022 issue of<\/em> Maclean\u2019s <em>magazine. 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Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/www.macleans.ca\/economy\/why-we-need-to-tax-million-dollar-homeowners\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Why we need to tax million-dollar-home owners&#8221; To tackle the scourge of housing unaffordability, older, wealthier homeowners need to chip in Paul Kershaw is a policy professor at the UBC School of Population and Public Health. He is the founder of Generation Squeeze, a think tank that promotes well-being and fairness for Canadians of all&#8230;<\/p>\n","protected":false},"author":1,"featured_media":480827,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/www.macleans.ca\/wp-content\/uploads\/2022\/07\/Mac_Snowglobe_Grass_Final-766x431.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[81958,94918,103693,70551,71226,132019,130648],"class_list":["post-480826","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-affordable-housing","tag-canadian-real-estate","tag-home-ownership","tag-inflation","tag-real-estate","tag-tax","tag-the-big-idea"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/480826","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=480826"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/480826\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/480827"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=480826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=480826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=480826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}