Taxing home equity would be “your political funeral,” a real estate lobbyist yesterday told the Senate national finance committee. It followed testimony from a Canada Mortgage and Housing Corporation (CMHC) tax consultant who complained housing made widows rich in Vancouver, according to Blacklock's Reporter..“It would be political suicide for anyone to suggest this,” said Michael Bourque, CEO of the Canadian Real Estate Association. “Those who do suggest it would probably preside at your political funeral.”.Parliament currently does not tax principal residences. Introducing a tax now would punish Canadians who relied on paid-up home equity for income when they are too old or sick to work, testified Bourque..“Most Canadians have assumptions about their retirement based on the value of their home,” said Bourque. “It’s why they can afford to sell their home and move into an old folks’ home or into some kind of care.”.Professor Paul Kershaw of the University of British Columbia, a CMHC consultant, yesterday testified tax-free gains in housing made widows rich in cities like Vancouver. “Do we want our housing system to be a strategy in which we treat it as an investment commodity, a way to get rich?” said Kershaw..“Think about the widow in Fredericton who is on a modest income and her home has not gone up very much in value,” said Kershaw. “Then think about the same income for a widow in Vancouver.”.“They are typically paying the same taxes on their income but the widow in Vancouver likely lives in a home that is now worth $1 million or $2 million or $3 million,” said Kershaw. “Their financial circumstances are not the same but we treat them identically.”.The CMHC paid $450,000 to commission and promote a January 5 tax report by Kershaw It proposed a $5.8 billion annual tax on home equity and complained rising home values saw “windfalls gained by many homeowners while they sleep and watch TV.”.Kershaw yesterday told the Senate committee that cabinet should ensure home prices are capped or decline. “We need to recommit as a society and have our Government of Canada say, ‘Going forward our goal for the housing system is that home prices don’t rise any longer,’” he said..“What we’re needing is a strident strategy that says our goal is for home prices to stall indefinitely if not fall moderately and give earnings a chance to catch up,” said Kershaw. “If that’s not our goal for the housing system going forward then we are losing track that housing ought to be for homes first and investments second.”.Cabinet has repeatedly promised it will never tax home equity. “The government is not charging or even thinking of or considering charging capital gains taxes on primary residences,” Housing Minister Ahmed Hussen testified last February 14 at the Commons human resources committee. Cabinet “has said this again and again,” he added..“I think it’s fair for Canadians to be suspicious,” replied Conservative MP Matt Jeneroux (Edmonton Riverbend.). “This is a slippery slope, minister.”
