Realtors and Edmonton’s real estate board are opposing a potential tax on luxury homes after a city councilor asked the administration to consider such a tax last month.
In June Ward papastew Coun. Michael Jantz asked the city administration to study how the estate tax could be applied to property taxes and write a report on his findings.
Janz says he wants people who earn more to pay more, so he offsets taxes for owners of cheaper properties.
“How do we make sure that when we collect services that are for the good of all, those who have a little more can contribute a little more,” Janz told CBC News.
In Vancouver, city councilors recently rejected a proposal to implement a progressive estate tax that would see homeowners pay an extra one per cent on homes worth more than $5 million and two per cent on those worth more than $10 million.
As for when the tax rate and home price thresholds will be, Jantz said the city administration’s findings will allow him to determine those logistics.
“It may not be [based on] the actual value of the property,” Janz said. “It may refer to the features of the home; that someone with a gold toilet should pay more than someone with a porcelain toilet.”
Some brokers openly opposed Janz’s idea, suggesting it would drive Edmonton’s biggest investors out of town.
Marlene Pahl, a real estate agent with Royal LePage, has listings that qualify for estate tax. She and her colleagues think such a tax “is just ridiculous,” she told CBC News in an email.
“So-called estates are already taxed according to their value,” Pal said, adding that in the long run an estate tax could reduce city revenue.
Edmonton also has fewer mansions than other Canadian cities, such as Vancouver and Toronto, she said.
According to Jantz, there are 4,000 homes in the city worth more than $1 million.
Bradley Mitchell, CEO of the Alberta Real Estate Association, believes an estate tax would be unfair to those particular homeowners.
“The concept is a little weird,” Mitchell said. “Property taxes are fair the way they are. Just because you’ve been more successful doesn’t mean you should pay a higher rate.”
Placing an additional tax on more expensive homes, Janz argued, would help reduce annual property tax increases for other homeowners.
“We need to collect more of this tax from those at the top,” Janz said.
The investigation should be completed by September, when Janz will present a proposal to the council, he said.
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