In a recent media release by Tim Hudak, CEO of the Ontario Real Estate Association (OREA), he points out the obvious that “… home ownership is expensive and is slipping further out of reach for too many Canadians”.
“Canadian homeowners already pay a punishing land transfer tax when they get the keys to their home, as well as increasing property taxes every year. And now, they want you to pay even more,” says Hudak.
According to OREA, (CMHC) Canadian Mortgage and Housing Corporation-funded report proposes yet another tax on Canadian homeowners, which would be calculated annually with the option of paying it each year or deferring it until the sale of the home. Much like a capital gains tax, this would punish seniors and middle-class families who have played by the rules and who, for many, are relying on their homes as a financial nest egg for retirement.
When it comes to seniors, particularly those on fixed incomes, it is becoming more and more difficult for them to simply maintain their homes given the rising cost of property taxes, utility bills and groceries and, to be faced with yet another tax, would be onerous.
OREA maintains that the Government of Canada should distance itself from this report and state that it has no interest in a new tax on home equity on an already oppressively taxed population. It should also direct the CMHC to stick to its core mandate, focus on increasing housing supply and choice, and refrain from this kind of political activism.
On the CMHC website, it actually states:
“CMHC exists for a single reason: to make housing affordable for everyone in Canada. We know that housing helps people stay employed, do better in school and participate more fully in society. Housing affordability and a stable housing finance system support a stronger, safer Canada where everyone can live with dignity.
Affordable housing for all is an ambitious goal, and we can’t do it alone. We’re mobilizing the expertise and energy of governments, non-profits, lenders, developers, social entrepreneurs and co-ops to create the future of housing. Canada’s first-ever National Housing Strategy is just one example. Together, we’re removing barriers to ensure that no one is left behind.”
“We said before that where there’s smoke, there’s fire,” adds Hudak. “In 2020, it was reported that CMHC spent $250,000 in partnership with the University of British Columbia’s School of Population to investigate ways to tax the equity Canadians have gained in their homes. CMHC denied the media stories, yet the report recently released shows that they are supporting research on an expensive home equity tax.”
“Time and time again, we’ve said that you cannot tax your way to housing affordability and Ontarians agree: according to a Nanos Research report conducted in 2020, more than 6 in 10 Ontario residents would oppose (50%) or somewhat oppose (13%) a new capital gains tax on primary residences. When you look at just homeowners, that opposition increases to over 7 in 10,” Hudak says. “A new tax on homes will add yet another barrier to Canadians putting their home up for sale, further restricting housing supply. CMHC, and the “anti-homeownership interest groups supported by CMHC funds” should focus instead on increasing housing supply and choice, especially for first-time home buyers, instead of trying to punish homeowners.”
Canada Mortgage and Housing Corporation is a Crown Corporation of the Government of Canada. It was originally established after World War II, to help returning war veterans find housing. It has since expanded its mandate to improve Canadians’ “access to housing”.
CMHC does not however, offer mortgage loan insurance products on various property types including duplexes, condominiums, manufactured or mobile homes and many more, including rental and retirement homes. In other words, on anything that was once considered affordable for many people.
“CMHC exists for a single reason: to make housing affordable for everyone in Canada.” What happened … or what is going to happen?