MPs have been told to raise taxes on real estate investors and use the money for affordable home subsidization, the Commons finance committee was told this week, said Blacklock’s Reporter..Ex-Toronto city planner Jennifer Keesmaat testified after the Canadian Mortgage and Housing Corporation (CMHC) revealed how many Canadians own second properties..“We know Canada’s housing system is broken,” said Keesmaat. “You’ve heard that again and again.”.Keesmaat is calling for higher taxes on residential properties bought by investors..“Investors” was not defined but she said those speculators account for 20% of home buyers..“That’s an estimate of the number across the country,” said Keesmaat..“It is estimated to be significantly higher in large cities like Vancouver and Toronto.”.Keesmaat said there is a need to create a tax to “tax capital gains in housing as you would employment income.”.She added principal residences must remain tax-free..“Principal residences obviously are homes as opposed to homes that have been acquired for the purposes of generating revenue,” said Keesmaat..“Tax investors who own homes, the revenue they generate as income, which we do not do today,” said Keesmaat..“For example, a rental company that owns an entire rental building, the revenue they generate is taxed as income.”.“But an investor who may own an entire floor in a condo building is taxed 50% less in our current taxation system.”.“We have an opportunity to actually put a fairer taxation system in place that will also act as a disincentive to investors buying up floors,” said Keesmaat..“The revenue from this taxation could be used to incentivize and subsidize affordable housing,” said Keesmaat..“It would likely create a recalibration within the marketplace that would take a couple of years, but then our construction industry would be focused on building affordable housing.”.Sales on second properties like vacation homes are currently taxable, the Canada Revenue Agency implemented the rule in 2016 along with penalty of $8,000 fines..“Housing is a great place to make money,” testified Keesmaat..“We have truly financialized housing. So the question is, how do we reverse that? Government policy can play a critical role.”.In 2017, the “empty homes” tax was introduced in Canada, in which non-resident offshore buyers are charged..A tax of 1% annually is worth $175 million, according to the Parliamentary Budget Office..Ewa Sudyk is a reporter with the Western Standard.,.esudyk@westernstandardonline.com
