Owners of Vancouver's most expensive homes pay very little tax, UBC study finds
Owners of Vancouver's most expensive homes pay very little tax, UBC study finds
A new study from the University of British Columbia has found owners of the most expensive properties in Vancouver are paying very little income tax.
Researchers found the top five per cent of homes as of 2018 had a median value of $3.7 million, but the median income tax paid by the homeowners was $15,800 – 0.42 per cent of their home’s value.
In contrast, owners of Vancouver homes with a median value of $984,000 – less than a quarter of the top tier – paid $12,500 in income tax, which is 1.37 per cent of their home’s value.
Study co-author Thomas Davidoff, an associate professor in UBC’s Sauder School of Business, called the findings “outrageous.”
“There are lots of people who pay a ton of income tax who own expensive homes, but there's too many people who are clearly affluent who don't contribute much to taxation in British Columbia and that's a failure of the progressivity of our taxes," said Davidoff.
He said it’s possible some owners are not paying as much income tax because they may have inherited the wealth, or they’ve brought money from overseas.
He suggests the city should implement a minimum income tax based on property value to level the playing field.
"What we've proposed is people have to pay an income tax of one per cent of their property value," Davidoff said.
"I think it's a pretty widely held belief that people with the greatest ability to pay should be those who pay the most taxes. There's people who disagree with that. There are people who think, ‘No, your ability to pay should be unrelated to how much tax you pay.' But generally in Canada, we seem to, based on income taxation, believe in progressive taxation.”
He hopes an equal tax for all will help fix what he describes as a weak relationship between income tax and property value in the city.
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