Here’s why the city needs a mansion tax
Homelessness could become a thing of the past, argue Jean Swanson and Anne Roberts.
Most of us, appalled by homelessness, ask ourselves: How can we have people sleeping on our streets when we live in such a wealthy country? How can it be that working people, especially young ones, are earning less and less and can’t afford to pay the high rents in the city? Surely there must be something we can do about these two problems. There is.
The answer is to provide the rental housing these two groups desperately need. The federal government says it has a housing strategy, but money doesn’t seem to be flowing to the housing we need. The province is funding a bit of housing, but not nearly enough. How can the city raise the revenue we need?
We’re proposing a mansion tax to end homelessness and build nice non-market rental housing. An extra tax of one per cent of the assessed value of mansions between $5 million and $10 million and an extra tax of two per cent on the value above $10 million. This could raise about $174 million in the first year. The majority of revenues would come from just 420 mansions worth more than $10 million.
The mansion tax proposal is nothing more than a graduated tax on property, similar to the graduated income taxes we all pay: low-income people pay a lower rate than middle- or upperincome people. However, all property in B.C. is taxed at only one rate. It’s the same rate for a mansion owner and a bachelor condo owner. That isn’t fair, especially given the massive property appreciation that has taken place these past five years. Land values in Vancouver increased by $90 billion in the last year alone (2016-17).
What’s even more unfair is that when resident homeowners sell their properties, they do not pay taxes on the gain in value since the home was purchased. Owners of properties that are secondary residences or commercial businesses have to pay a capital-gains tax on
50 per cent of their profit when they sell.
Provinces sometimes do what cities ask them to.
Although some mansion owners may be hard-pressed to pay the bills each year, they still have more options than people living on the street. One is to defer if the owner is over 55 or a family with children. Another option might be to move. Someone might sell a $6-million mansion, buy a $2-million house, and live without having to work the rest of their lives on $100,000 a year for the next 40 years.
Some people ask: Is creating a mansion tax outside the city’s jurisdiction? Yes, it is, for now. But in 2014, COPE, the civic party we’re running for city council with, called for a vacancy tax on empty homes. It’s now 2018 and we have a vacancy tax. It’s not enough to pay for all the housing we need, but it shows that provinces sometimes do what cities ask them to.
Some people complain that we already have a mansion tax. They are referring to the recent school tax that the province implemented on homes worth over $3 million. We support the school tax, but it doesn’t solve our housing problems. Firstly, the revenue is going to the province, not the city. Secondly, the revenue is not earmarked for non-market housing. Vancouver still needs a mansion tax that provides revenue for housing only.
Just think what we could do with the money. We could virtually end homelessness in a year by building modular housing. All those folks who have to sleep on the street or in shelters could have a cosy bed, a fridge and stove, a bathroom, and a door to lock. After the first year, we could start building beautiful non-market housing for people who are paying an arm and a leg for rent now, so they too can have secure housing and afford to live and work in the city.
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