A survey conducted by the Canadian non-profit, Generation Squeeze, and Research Co., found that the majority of Canadians are in support of a surtax being imposed on homes that are valued at over $1 million. 68% of Canadians were found to be in support of a modest surtax being paid by those that own the most expensive homes.
About 10% of the country’s housing market is made up of these high-end properties. Of the 1,010 respondents, 57% lived in such homes and said they would be in favour of paying a modest price for housing inequity. The strongest support for this proposal came from Atlantic Canada at 73%, followed by Saskatchewan and Manitoba at 72%.
According to Generation Squeeze, more Canadians are interested in having changes made to the dysfunctional housing system that was putting young aspiring homeowners struggling with the gap between their earnings and climbing housing prices in competition against older established homeowners that had bought their properties decades ago and were now benefitting from wealth windfalls.
The survey found that the majority of Canadians wanted the levy to help in reducing the unaffordability of housing, wealth inequity, and the healthcare system. 43% supported income tax deductions for mid to lower-income earners while 40% supported the creation of more affordable housing.
The survey further established that a majority of 86% of Canadians recognised the harm that was being created by rising home values that were locking out young people from affording homes. That over half of those that had already benefitted from this appreciation in property values and owned homes valued at over $1 million supported the proposal to pay more to promote affordability and reduce inequity is admirable according to Generation Squeeze.
A majority of Canadians were also found to be in support of easing the home ownership tax shelter. This measure has exempted any increases in the value of principal homes from being taxed. Respondents blamed the tax shelter as much as the unethical behaviour of real estate agents for the decline in housing affordability. They also attributed a failure by developers to supply the right kind of housing and criminal activity for contributing to the problem.
UBC School of Population Health policy professor Dr Paul Kershaw said that the tax shelter had become a harmful policy that incentivized property owners to want home prices to increase. The policy is estimated to be costing the federal government an estimated $10 billion annually, while provinces are believed to be losing about $5 billion.
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