CmB magazIne cmba-achc.ca spring 2018 | 9
sacrifices experienced by previous generations.
ey too struggled to save for a down payment
and qualify for a mortgage – likely in an era
of crippling double-digit interest rates. ey
didn't win the lottery. ey weren't simply
lucky. eir ownership of expensive housing is
more a function of where they sit in their life
cycle. House prices tend to double every seven
to 10 years, so once you manage to get into the
real estate market and pay off your mortgage,
you are le aer many years with a valuable
asset. Now the government wants to eat away
at their equity, just because it sees something
new to tax.
Ironically, due to this very predictable
rate of house price appreciation, over time all
homes will be subject to this tax, which was
intended only for expensive homes. ese
measures will simply make housing more
expensive for the middle class, while causing
the wealthy to flee.
Capital flight resulting from progressive
asset taxation is a phenomenon other countries
have experienced. France, for instance,
retreated from its wealth taxes following a
profound net loss of tax revenue, employment
and, yes, wealth in the 1990s.
In addition, residential properties
captured by the school tax include single-
family homes containing rental units, such as
basement suites or homes divided into two or
three suites. Landlords will recoup housing
ownership cost increases by hiking rents,
thereby worsening housing affordability for
tenants. ere will be a cascading effect on
both housing prices and rents, as increased
housing costs are downloaded to both
buyers and tenants.
As we are all acutely aware, there is
a market imbalance fuelled in part by
interprovincial migration and immigration,
where housing demand seriously outstrips
available housing supply. In this market
environment, adding costs to higher-end
homes will put pressure on all home prices,
even those of entry-level homes.
What might not be apparent to
homebuyers reviewing the government's
new suite of tax measures is that they will
truly cost everyone, making it even more
challenging for first-time homebuyers to enter
the market and for renters to make ends meet.
Housing taxes might sound appealing to
voters and help precarious governments with
their re-election plans, but in the end they
will serve to worsen housing affordability.
We need to take a closer look at this major
shi in tax policy and understand how it
will impact all of us and worsen, not help
housing affordability.
1 business.financialpost.com/opinion/jack-mintz-three-
sneaky-tricks-hide-the-ugly-truth-about-government-
budgets
