Owning a multi-million dollar home with a luxury pool or movie theater can pay off in many ways. But next year, owning a mansion in Edmonton could lead to paying more property taxes.
“Right now, if you live in a $ 300,000 house, a $ 3 million house, or a $ 12 million house, you pay the same amount and that’s a problem,” Ward papastew Coun. said Michael Janz.
Earlier this week, the city council approved a motion filed by Janz to investigate options to implement a “house tax” next year.
“It’s not fair for people at the bottom to pay the same compared to people who have a lot more ability to pay their taxes at higher rates,” Janz said.
Read more: An annual surcharge of 0.2% on homes worth $ 1 million or more could cool the real estate market: report
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Janz added that the change could see an increase for homes valued at more than $ 1 million or a reduction in housing taxes below that range.
Either way, Janz wants the extra tax money to go to housing the city’s vulnerable people and other social programs.
“If we are able to get a little more revenue, or rather distribute the burden a little more fairly to people who are at the lower end of the tax spectrum, we can help them have a little bit of more affordability, ”Janz said.
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But economist Moshe Lander said implementing a mansion tax could be economically counterproductive.
“If the city council really wants to do something, it’s not this Robin Hood exercise of‘ Let’s target a group of people and get them money, ’” Lander said.
“This group of people are mobile and what they will do is sell their house and move to avoid tax.”
Lander said short-term gains are unlikely to outweigh long-term profits.
“The people who will move out of the city are exactly the people you want in the city,” he said.
“They are the ones with the most wealth, the highest incomes with probably the most influence on employment and jobs.”
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Janz says of the 4,000 homes valued at more than $ 1 million in Edmonton, they are the ones worth $ 2 million or more that he would like them to pay more for.
Read more: Edmonton 2022 property tax notices are in the mail
This year, homeowners will see a 1.9 percent city tax increase. On average, this translates into a $ 14 increase for every $ 100,000 in appraised property value.
The city is expected to raise just under $ 2.3 billion in property taxes, of which $ 496 million will be raised on behalf of the Alberta government for provincial education.
The house tax will be discussed further in council chambers this fall.
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