Last weekend, longtime anti-poverty activist, Jean Swanson pitched 2 special property tax brackets for high value homes at a rally in Vancouver's Point Grey neighbourhood.
The 2 proposed tax brackets would draw an extra 1% from homes assessed at $5 million and higher, or 2% from homes assessed at $10 million and higher. This would affect approximately 4,942 homes and would generate about $174 million annually.
She went on to say that we are in the middle of a housing crisis and have about 2,000 people homeless on the streets dying at half the age of others. The average 1 bedroom apartment is $1000 a month, more than the total minimum wage of a full time worker.
This $174 million could go to modular housing for the homeless, then social and co-op housing.
Andy Yan, from Simon Fraser University City Program is intrigued by how this top 3% of the city's properties alone held 14.2% ($39.5 billion) of the markets total $278 billion assessed value. He goes on to say that maybe we should consider a progressive land tax, because we actually have other taxation schemes (like ICBC) vehicle tax for luxury cars as examples. It's not a foreign system, it's not something that's coming totally out of the blue.
The idea of a 'mansion tax' is not new either. The state of New York implemented one in 1989, though it functions as a transfer tax on real estate worth more than $1 million. Vancouver's proposed tax more closely resembles an income tax recently approved by Seattle's city council, which when implemented will draw 2.25% annually from residents earning more than US $250,000.
UBC economist, Thomas Davidoff, said the tax would primarily affect homeowners who bring money from outside of Vancouver into the city, and is particularly beneficial to residents. He says, 'It's very hard to find anything undesirable about raising taxes on high value Vancouver property, but obviously it's bad for the rich guys.
Davidoff drew a comparison between a homeowner living in a $5 million mansion, declaring a poverty income and paying $20,000 a year in property tax but no income tax, and a tech worker making $200,000 a year and renting but paying $60,000 in income tax. The idea that somebody sitting on a $5 million property, not working, ought to pay way less tax than somebody renting and working, making $200,000, doesn't make sense.