The Toronto Regional Real Estate Board is opposing the idea of a federal tax on vacant residential land.

Hiking taxes on such lands is a “risky measure” that may result in costs passed on to to new home owners and reduce housing affordability said Jennifer Pearce in a statement issued after the federal government introduced its 2024-25 budget. During the budget release, Prime Minister Justin Trudeau broached the idea of a tax for vacant land zoned for residential use to boost development and help reduce Canada’s housing shortage..

The government will hold public consultation on the topic later this year. Such a tax could may affect lands intended for condominium, multi-family rental projects as well as single-family homes.

Meanwhile, Pearce voiced opposition to a capital gain tax increase included in the new budget. Corporations and trusts will be taxed on two-thirds of a capital gain, up from the previous 50%. Individuals will experience a similar increase on capital gains of $250,000 or more. The increase will apply to individuals secondary properties that increase in value or are sold for a profit of more than $250,000.

But Pearce said the increase could increase the costs of converting underused commercial properties into new housing.

“No plan from any level of government that proposes to end the housing affordability crisis can achieve real progress unless it addresses the government taxes, fees, and charges on housing,” said Pearce.

Photo: Courtesy of Pace Group/CLHBid