In an attempt to deal with an affordable housing crisis, the Dutch housing minister recently proposed a law that would have allowed municipalities to force some property owners to sell their homes only to low and middle-income earners. The problem the policy is trying to fix is one that’s particularly acute in Canada.
The solution is a wealth tax. It worked for the first 10,000 years of human civilization, after the 100 year failed experiment of income/sales tax it’s time to go back.
Yep, tax capital, not labor. It seems so obvious.
Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. --Abraham Lincoln
That was back when labor was biological. The only form of automation was animal labor. Now machines can do so much without any human labor at all. Taxing income only gets worse since these machines don’t have an income. Some companies can run without any human interaction at all, just a company self inflating it’s value. I’ll only get worse with AI and robotics. We need a way to keep these companies from just consuming all resources and paying nothing back.
Easy. Tax capital, not labor.
If only there were something…
No it didn’t. For those 10k years, most people lived under the iron fist of a monarch who owned everything and everyone.
Instead now we live under the iron fist of a government beholden to capitalists who own everything and everyone. Huge change.
It’s at the point where it’s clear no single measure will solve this issue. What is absolutely infuriating is that NOTHING is being done. Actually scratch that, they are actively making things worse with crap like the “First Home Savings Account”.
Just start saving when you are born and if you save enough you might be able to put a down payment on a house when you are 40 and qualify for a 90year mortgage.
I wouldn’t say nothing is being done. Vancouver for instance is moving at snail’s pace towards better zoning, but it is moving. Also, the city has been unapologetically green lighting most projects involving high rises (which brings a host of other issues, but it does count as doing something). The thing is, this is not nearly enough, and apparently intentionally so.
Sorry, should have been more clear. I meant at the federal level. I get that they are somewhat limited in their abilities, but again, everything they have done thus far has _only _made it worse.
Hmm yeah I don’t follow the federal politics as much I should, but I’d say my impression is the same then. I guess interest rate policy is something but that’s a big can of worms as well.
- Scale property tax for number of properties owned. Double it per property owned.
i.e. own 2 homes, property tax for ALL homes owned doubles. Own 3 homes, pay 4x property tax. etc. Homes should not be hoarded. And corporations are definitely not exempt, except perhaps before first sale (i.e. they constructed the property) or demolition sale (buying multiple properties for demolition to be able to construct denser units)
- Add or expand speculation tax (like the empty homes tax): it should be decently large, like at least 10% of the property’s assessed value per year. However, it can be negated based on income tax paid by someone who lives at that location (as reported on their tax filing). There may need to be some additional reductions for retirees/seniors too.
Either way somebody’s gotta live and work there to avoid the tax. No “students” owning multi-million dollar mansions.
And then use the tax income to fund construction of government housing, to rent out at cost
Yup, I’ve always advocated for a punitive tax on owning more than one residential home. Start with corporations, 1% extra tax on the value of the property each year, increasing at 2x the rate of inflation each year. Two of three years after that, then apply it to privately owned second homes… Within 10 years, the annual tax on any second, third, fourth homes will be greater than any possible profits, and those houses will come on the market as various properties pass into not being profitable investments anymore.
And as others have said, use the collected tax for affordable housing. The best thing to do is for this money to be used to buy condos in existing buildings, and place families there, to prevent “ghettoization” of neighbourhoods.
Why not ban anything past a primary home? It’s like at a wedding where everyone gets to eat first before going for seconds.
I guess it’s a political non-starter given the number of people who own more than one home…
A grandfather clause could be added, so that ‘from now on’ people can’t buy more than 1 home. But there are plenty of less severe ways to fix the problem. A lack of solutions isn’t the issue, anyway. The problem is that rich people who control countries don’t want to fix housing problems, since they are often the people benefiting.
There can be some good reasons to own multiple homes, so rather than banning it you tax it. That way people can still do it and the city gets more funding for allowing it. Those that can’t do the tax will sell down.
Scale property tax for number of properties owned. Double it per property owned.
I’d like to see that happen, but I’d also like prohibitively high taxes for homes over 2000 sq’. Nobody needs a house that big, and if we’re destroying natural habitat to fit ultra large homes, then someone should be paying heavily for it.
Add a yearly tax that is tied to (federal reserve interest * house value) for anything other than primary residence and since people are corporations they would also be affected.
People aren’t corporations. In the US, corporations are considered ‘people’ for legal purposes. Anyway, making it illegal for corporations to buy investment houses would be great.
Here’s an easier solution: make real estate a poor investment by raising property taxes. It either works (great) or it doesn’t (also great, because now the government has more money and more resources to build out infrastructure and housing).
That would put a lot of pressure on those who are struggling.
Taxes should be income based.
The city already has programs in place to reduce and write off property tax bills from people who are struggling.
Income is a poor measure of wealth.
You can make the tax apply only to corporate owners, or properties that are not an individual’s primary residence.
Yes that would be a good idea. Disincentivise hoarders.
I’m in the lowest tax bracket. I only made about $34k last year. The amount of income tax I paid was equivalent to about 25% of my total wealth.
Calculate 25% of your total wealth. How would it feel to pay that much in taxes? Because that’s how much I paid.
Fuck income tax.
What province do you live in?
How much is 25% of your total wealth?
I want to know which province you live in to know what the tax brackets are.
I want to know what 25% of your total wealth is so you can be confronted with number and forced to think about what it would be like to pay as much tax as I do.
My friend, I’m not against you. I don’t know why you’re acting like this.
Taxes should be income based.
I think taxes should be mostly wealth based, not income based.
You want to know why?
Because it’s easy for some rich bastard to report zero income while having billions in assets.
Someone who already can’t make end’s meet would feel the sting of any amount of taxation in day-to-day life compared to a billionaire.
Wealth hoarding should be severely taxed. You want more land than humanly acceptable? Six houses at 10,000sq+ each? 15 cars? A tennis court and equestrian ranch for friends and family? Fine, get ready to pay a lot for it on an ongoing basis.
Taxes being income based puts more pressure on those who are struggling than land value or wealth taxes.
well not across the board, we want to discourage investment purchasing, not owning a family home. Multiple dwellings should be taxed extremely high, and shell corporations who buy and rent homes need to somehow be cracked down on.
Or why not tax income made from rental homes to an insane degree - need to make renting out homes not attractive to investors. If there is little benefit to renting out dwellings, it might encourage investors to sell off homes. Further encourage selling to non-wealthy people through more tax incentives or something.
Stepped tax rates for each property you own.
1st property normal rates.
2nd property 2x normal rate
3rd property 3x normal rate etc.
Need to figure out how to ban shell corporation ownership of property though.
I think taxing investments would be simpler and make more sense. This is briefly mentioned at the end of the article.
So when is the next election? Looking forward to hearing the phrase “housing crisis” on repeat. Specifically the montage of various politicians saying the phrase over and over and over again that CBC, CTV, Global et al will each produce at least one of. Might this actually put the NDP on the map?
An interesting idea but I feel like there are too many loopholes. What about people who incorporate holding companies for their rentals? What about people who earn their income in their corporations, and can control if they are “low income” in the year they purchase a house? If there’s a lower earning spouse, can they be the ones to list it at whatever price? Canadian cities vary greatly with their real estate markets - will the cutoff price be decided in each city? Will the cutoff only be adjusted for inflation, or will it be adjusted based on market rates?
If there is tax planning to be had, the rich will find it!
I’m don’t want to be that Debbie Downer, but this shit isn’t getting solved any time soon. Even if more housing was built, the levels of immigration being thrown into the mix skews the numbers of available affordable housing.
There are many things that all levels of government could look at for examples outside of Canada, that could help fix the issues but they have 0 incentive to do anything.
I hate saying it, but if I were young, I would be doing whatever I could to get a work permit in a different country that understands how important housing is and start a life there.
We need to take a multi-tool approach to this crisis. This is a great idea, as well as increasing the supply of homes and removing impediments and red tape when it comes to housing construction, as well as public housing.
