The problem

Housing has been eating up an ever-growing share of our incomes, saddling families with a lifetime of debt that sees them lose just as much in interest payments as the wealth they accumulate in their home. This drastically increases the cost of living, weakens the economy, deepens inequality, and shuts people out of the housing market indefinitely.

If we want homes to be affordable, we must address the fundamental reason they are expensive: our shared expectation that land is a good investment.

The solution

Lower the price of housing by making land less valuable as an investment.

The policy that will accomplish this

A tax shift away from incomes and onto land. A 17% tax would apply to the value of land held by all property owners, excluding the value of buildings and improvements.

This equates to just 4.2% of present land values (nominally 2.4% of median residential property value).

This would be introduced with a corresponding reduction in personal income taxes, raising the 0% tax bracket up to $88,000/year.

Why?

Because the only way to adequately address the housing crisis is to lower the price of homes.

And the best way to accomplish that is to make land less attractive as long-term investments.

And the most equitable way to do that is to shift taxes off of earned incomes and onto unearned land values.

What would this plan do?

1. Lower land prices by 75% — the majority value of most properties — making the median home 40% cheaper.

2. Reduce income taxes for most Canadians. If done nationally, it could result in a 0% tax on your first $88,000 of income, meaning over 90% of Canadians would pay no income tax.

3. Encourage housing supply where needed. Incentivize densification and construction on underused land, including much-needed “missing-middle” housing.

4. Promote sustainable and livable cities. Increasing the cost of holding land encourages more productive use of it, reducing demand for urban sprawl and promoting more effective use of city resources.

5. Favour families over investors. Reduce demand from investors, leaving more homes to be built and priced for families.

How?

• By increasing the cost of owning land to almost as much money as it can make, prices would fall. A 17% annual tax on land would reduce its price by 75%, bringing down the #1 factor in real estate values.

• By using every dollar generated through a land value tax to lower income taxes, most Canadians would pay less tax overall.

• With sufficient political will and consensus, this reform could be introduced at any level of government. Polling shows that 70% of Canadians would be happy if home prices fell.