Tax the Rich and Speculators

Mansion Tax

The provincial and federal government have the power to tax income and the tax rates are often set progressively so that those with higher incomes are taxed at a higher rate. The City has the power to tax property, but it has always set a flat tax rate rather than have it rise progressively with property values.

Chip Wilson pays the same tax rate for his $75 million home as a family with a $750,000 home. That is outrageous. Vancouver needs progressive property tax brackets!

There are more than 4,500 single family homes worth over $5 million. If we tax the value of homes over $5 million at an extra 1% and the value over $10 million at 2%, Vancouver will take in over $170 million every year.

We can use the Mansion Tax revenues -- $170 million per year -- to end homelessness, build social and coop housing, and start giving back land to indigenous nations.

Table 1. Mansion Tax revenues:

 

Number of properties

Mansion Tax rate

Extra tax revenues with our plan

Properties >$10 million

420

>5M: 1%, >10M: 2%

$112,000,000

Properties $5-10 million

4,532

>5M: 1%

$62,000,000

Total

4,952

 

$174,000,000

Those who own homes valued under $5 million will not be affected. The Mansion Tax is progressive: it does not affect the first $5 million in value of any property, and homes valued slightly over $5 million will not see significant increases. Note that this tax is comparable to the “Empty Homes Tax” which is also set to 1%. There is a precedent now that the province made the existing provincial property tax (called “school tax”) progressive in its 2018 budget.

Table 2. How the Mansion Tax works:

Cost of home

Current paid property tax

Tax paid including Mansion Tax

Increase to help the rest of us

$1 million

$2,555

$2,555

$0

$5 million

$12,774

$12,774

$0

$5 million and 1 dollar

$12,774

$12,774.01

$0.01

$10 million

$25,549

$75,549

$50,000

$75,821,000 - Chip Wilson’s mansion

$194,920

$1,560,134

$1,365,213


Tax on Big Business

Commercial property taxes are calculated at a flat rate -- like residential property taxes. The recent debate around shifting the tax burden from businesses to residential properties was a red herring. Our problem was not that businesses were disadvantaged compared to homes. It was that small businesses were suffering relative to big businesses, and that lower-income homeowners were suffering relative to those with mansions and luxury properties.

We need a progressive property tax system that protects small businesses like neighbourhood stores and taxes large corporations like big box stores. Using the definitions of business size from federal regulations, we propose a progressive tax with a:

  • Lower rate for small businesses with less than $500,000 active income,
  • Middle rate for medium-sized businesses with under 500 employees and more than $500,000 active income,
  • Higher rate for big businesses with over 500 employees.

Dedicate all new property taxes toward building public housing

All funds collected from within the City of Vancouver by the Province of BC under the ‘Foreign Buyer Tax’, the Speculation Tax and the 2018 progressive brackets of the School Tax and Property Transfer Tax should be returned to the Vancouver Affordable Housing Agency to address our housing crisis.

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