Residential property values in British Columbia have surged by a staggering $1.7 trillion over the past two decades, leading to a growing disparity between homeowners and renters. Hemingway's policy proposal, outlined in a white paper published with the Canadian Centre for Policy Alternatives of B.C., suggests that property tax reform could be the key to addressing this inequality.
Hemingway's plan primarily focuses on increasing taxes on high-value properties and individuals who own multiple homes. By doing so, he envisions raising billions of dollars for public housing projects while simultaneously dampening long-term home price growth.
One of the cornerstones of Hemingway's proposal is the adjustment of property taxes on the most valuable properties in B.C. He suggests doubling the provincial property surtax on residential properties valued above $3 million and $4 million, as well as introducing a new bracket for properties above $7 million. This measure alone could generate an additional $580 million annually.
To further bolster public housing initiatives, Hemingway recommends applying extra property taxes to owners of multiple homes and properties valued at over $1.5 million. This proposal would affect just 12 percent of B.C. households but could contribute approximately $2 billion to public housing projects.
While property tax reform can be complex and contentious, Hemingway proposes the establishment of a citizen's assembly to engage in open discussions about the options. This approach would involve the public in shaping the future of affordable housing in the province.
Hemingway's proposal also encourages shifting the tax burden away from buildings and onto land, which could incentivize the construction of denser housing options—a move that aligns with the broader goal of addressing housing shortages.
In addition to these changes, Hemingway suggests considering a consistent property tax rate, rather than allowing it to fluctuate based on property values. Such stability could ensure that more land value gains are captured for the public good.
To address declining property values, Hemingway proposes implementing a rate floor, particularly in regions where home prices have become significantly misaligned with local incomes. Moreover, he suggests expanding property tax payment deferrals until a property is sold, potentially making this option available to a broader range of homeowners.
At the heart of Hemingway's proposal is a commitment to disincentivize housing and land as assets, thereby redirecting resources toward affordable housing initiatives and addressing inequality in the province.
While this proposal may seem ambitious, it aligns with the idea of a "tax shift" supported by think-tank Generation Squeeze. This plan aims to lower income and sales taxes while increasing property taxes on properties valued at over $1 million. Such a shift seeks to create a fairer tax system and fund the growing social and health needs of an aging population.
In a time when housing affordability is a pressing issue, Alex Hemingway's progressive property tax system proposal offers a compelling path forward. By generating revenue from those who have benefited most from soaring property values, British Columbia can take meaningful steps toward creating a more equitable housing landscape for all its residents.