Tax without end

Fearing oblivion and desperate for salvation, builders are clutching the robes of the prime minister.

‘Please, boss,’ they beg. ‘Trash the GST on all new homes, give the rebate to buyers, and lean on the local politicians to snuff their development charges.’

Well, the GST/HST thing is a no-brainer. It will happen. As for the DCs, this is the money builders pay to municipalities for stuff like roads, sewers, pipes, parks, lights, firehalls and schools. It’s serious coin. In the GTA, the industry says, it’s averaging $150,000 per house, or about 36% of the total cost. The charges are ultimately collected from buyers as part of the purchase cost.

But wait. They’re not buying. Single-family home sales are down over 70%. Condo deals have crashed 90%. As we have reported before, there are 22,000 new and unsold housing units in the Toronto region alone. Another 2,000 new condos are available in Vancouver. Several million in Kelowna.

Real estate ownership, obviously, is hitting a wall. The costs of buying are immense, especially a new build. The cost of selling is even more daunting. And in between, real estate overhead is escalating as property taxes rise and cities simply run out of money. For example, the hike this year in our biggest metropolis (with an operating budget of $18.8 billion) is just under 7%, or four times the rate of inflation.

Property tax is one of the unfairest forms of government revenue. It is divorced from a person’s income or their ability to pay. It’s based on the market value of real estate over which an owner has absolutely no control. It seems to never go down. It’s not deductible from income tax, as in the States. And if you can’t pay, you can’t sell your house – which might even be seized by the authorities.

So much for the right to own property (which we don’t have).

Property taxes vary wildly across the country. In Nova Scotia, for example, a home assessed at $1.8 million attracts $24,000 in tax. But a property in Toronto worth $2 million is taxed at half that level. And in YVR, that house worth two mill attracts only $7,000 in local tax. (Of course we also have the vacant home tax, the speculation tax, property transfer tax and the federal flip tax.)

Well, it seems a tax revolt is brewing in the US. People there ask questions like, ‘Why should I pay for schools when I don’t have kids?’

The anti-tax movement seems to have momentum. Elon Musk says property tax turns all owners into leasers, and should be abolished. In Florida, governor Ron DeSantis is mulling eliminating it. “If you own your home, to truly own it, you have to own it free and clear of the government,” he said.

Voters in nine states have passed regs reducing, restricting, capping or curbing property taxes. On the Canadian border – in Michigan and Ohio – there is a write-in ballot movement to completely eliminate local property tax. In Texas a proposed constitutional amendment would eliminate this form of levy.

The cost of abolishing property tax would be substantial. Toronto collects $5.3 billion a year from property owners – about a third of its total budget. In Vancouver the $1.1 billion in property tax represents almost half the city’s operating budget. In Halifax virtually all of the city’s $1.3 billion budget comes from the folks who own real estate.

In short, how would cities function without sucking off thousands from all property owners plus making new-home buyers fork out vast amounts for development charges? And is it fair that owners pay while renters surf?

Some people think governments try to do too much and need to scale back their size, scope and ambition. Do we need so many parks? Does the city have an obligation of provide shelter for the unhoused when working families can barely afford a roof? Should we be charging people when they use services? More toll roads? Fees for calling the fire department or the cops? Annual license fees for parks, playgrounds, splash pads, pool, rinks and skater places?

Is it fair to charge a senior living in the same house for decades, now on a weensie fixed income, a massive tax bill based on the inflated value of the property? (Some places – like BC – allow property taxes to be deferred until sale or death.)

Would reducing, even eliminating, property tax make real estate more affordable? Would it force local politicians to scale back on the size and burden of government? Those questions are being asked in the US, where personal tax rates are lower than ours, there’s no HST plus mortgage interest and some local taxes can be deducted form taxable income.

Are we taxed to dust? Or are the anti-taxers gutting society?

Good. One more thing to fight about.

About the picture: “Thank you for being a voice of reason in a sea of alternative facts,” writes Ian, in Toronto. “This is Sophie waiting patiently near her bowl. She was recently rescued from a puppy mill and had two tumours removed. Her prognosis is 1 to 2 years, but her only concern is whether her next meal is turkey with sweet potato or salmon with rice.”

To be in touch or send a picture a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/09/12/tax-without-end/