Terry Nichols

We tax cigarettes to reduce smoking – why are we taxing housing to death during a housing crisis? When taxes can make up 36% of a new home, it's no wonder Canadians can't afford them. On an average-priced new home in Ontario of about $1,070,000, consumers are paying around $381,000 in various taxes and fees. These taxes are messy and spread across all levels of government. However, the most pressing issue is with local "Development Charges", one-time taxes that are paid by a developer when creating a new house. In 2010, Toronto development charges had reached $12,910. Since then they have increased a further 993% to $141,139, far outpacing inflation. These taxes directly impact the cost of a new home. This difference prices many families and young people completely out of the market, preventing the home builder from selling that home, and ensuring that fewer homes get built. This vicious cycle further inflates the price of homes as new supply dwindles while demand remains high. The cycle is only getting worse. In 2024 alone, Toronto raised development charges twice, totalling a 40% increase, despite housing starts lagging and new home sales hitting record lows. It's clear Canada's approach to housing taxation needs reform: - Reform Municipal Development Charges – Require municipalities to freeze or reduce development charges at no more than $50k per unit to qualify for federal infrastructure funding. - Eliminate GST on New homes – This will immediately make new housing more affordable. - Create Home Builder Tax Incentives – Establish a performance-based tax credit system that rewards developers for increased housing starts. - Harmonize Housing Taxes Across Jurisdictions – Work with provinces and municipalities to create a national framework for housing taxation that eliminates duplicate taxation, establishes consistent principles and reduces the complexity that adds costs and delays. - Incentivize Commercial-to-Residential Conversions – Establish time-limited tax benefits to accelerate the conversion of underutilized office buildings to residential use. - Create Housing Tax Transparency – Establish a comprehensive database tracking all housing-related taxes, fees and charges across Canada. We need to stop taxing the very thing we need more of. Let's stop taxing homes out of existence. Read the full memo below: