Surtax Proposed on Homes Worth Over $1 Million
A new report financially backed by the Canada Mortgage and Housing Corp. suggests a progressive surtax on homes valued at more than $1 million could help rein in skyrocketing property prices.
The proposal would establish an annual surtax starting at 0.2% on homes valued between $1 million and $1.5 million. Homes worth $1.5 million to $2 million would see a 0.5% tax. And those valued at more than $2 million would have a 1% tax.
The tax would only apply to the value in excess of the $1 million threshold.
For individuals with limited income, such as seniors, the proposal suggests that the taxes could be deferred until the house is sold or inherited.
Monies collected would be used to fund affordable housing projects.
The report, published by Vancouver-based non-profit Generation Squeeze, says the surtax would only apply to the top 10% of the most valuable homes and won’t cost 90% of Canadians a penny. However, with an average selling price for all home types in the Greater Toronto Area reaching a new all-time high of $1,095,475 at the end of last year, homeowners in this region would be disproportionately affected should the proposal come into effect.