Owning a multi-million dollar home with a luxury pool or movie room can pay off in many ways. But come next year, owning a mansion in Edmonton could lead to paying more in property taxes.
“Right now, whether 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. Michael Janz said.
Earlier this week city council passed a motion introduced by Janz to investigate options of implementing a “mansions tax” next year.
“It isn’t fair to the people on the bottom end who are paying the same compared to people who have much more of an ability to pay their taxes at the higher rates,” Janz said.
Janz added the change could either see an increase for homes valued at more than $1 million, or a reduction in taxes for homes under that range.
Either way, Janz wants to see any additional money from the tax go towards housing the city’s vulnerable and other social programs.
“If we’re able to raise a little bit more revenue, or rather spread out the burden a little more fairly for folks who are on the lower end of the spectrum tax-wise, we’ll be able to help them have a little more affordability,” Janz said.
But economist Moshe Lander said implementing a mansions tax could backfire economically.
“If city council really wants to do something, it’s not this Robin Hood exercise of, ‘Lets go target a group of people and take money out of them,'” Lander said.
“That group of people are mobile and what they are going to do is sell their home and move to avoid the tax.”
Lander said any short-term gains would likely not outweigh the longer-term benefits.
“The people that are going to move out of the city are exactly the people that you want in the city,” he said.
“They are the ones with the highest wealth, the highest incomes with probably the greatest amount of influence over employment and jobs.”
Janz says of the 4,000 homes valued at more than $1 million in Edmonton, it’s the ones worth $2 million and up that he would like to see pay more.
This year, property owners will see a 1.9-per cent municipal tax increase. On average, that translates to an increase of $14 for every $100,000 in assessed property value.
The city is expected to collect just under $2.3 billion in property taxes, with $496 million of that being collected on behalf of the Government of Alberta for provincial education.
The mansions tax will be further discussed in council chambers this fall.
© 2022 Global News, a division of Corus Entertainment Inc.
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2022-06-26 23:36:07Z
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