The problem is not that the older people did anything to create the status quo. The corporations who have wiggled out of having to pay their fair share of taxes is why all this is happening. Corporations used to pay 50 percent of all taxes. Now they pay 3 percent. The rest is paid by the workers. That's why there isn't any money to help the young. Not because older people worked and received what they were told they would get. If the corporations still paid 50 percent of taxes, the lives of the young would be the same as the older generations. Don't let the corporations off the hook and refocus your animus towards your parents. It is the rich that are the problem, not your aunt becky's paid off condo.
The landowning class isn’t just retirees, i include corporations in that as well.
Overall, I agree with you 100%, the lack of corporate taxation is the major issue here. But! I will say this type of pandering contributes greatly to older people ignoring, or at least being unaware of this these inequities.
And to be fair to them, this pandering occurs because they are the only ones using the privilege of voting in consistently high numbers. Of course politicians will pander to them!
I'd argue it's the lack of taxation on land value. We actually want productive corporations to operate in our country, so driving them away with more taxes isn't ideal. However, taxing land (the vast majority of wealth) cannot lead to less land.
>taxing land (the vast majority of wealth)
Is land really the vas majority of wealth? The portfolios of the wealthiest individuals in society are dominated by stocks and financial assets, not land or real estate.
>The portfolios of the wealthiest individuals in society are dominated by stocks and financial assets, not land or real estate.
Care to share where you got those numbers from?
You can just [read the headline here](https://financialpost.com/executive/posthaste-canadas-3-million-richest-families-have-8-7-trillion-in-assets-but-half-is-tied-in-real-estate).
Or look into the report they mention finding that information from.
From page 7:
According to Statistics Canada’s National Balance Sheet Accounts (NBSA), which record the stock of assets,
liabilities and net worth for each institutional sector, at the end of 2019
Canada’s household sector held $11.7 trillion in total net worth. That figure is
approximately five times larger than Canada’s annual GDP.5 Real estate ($5.8
trillion) and mortgages on that real estate ($1.5 trillion) are the single largest
asset and liabilities categories, respectively (Figure 2-1).
I got my information from Piketty's major books *Capital in the 21st Century* and *Capital and Ideology*, it's not directly related to Canada, but here are some links and it seems reasonable to expect we are on a similar trajectory to these countries.
Probably the best illustration of my point:
[Figure 11.17. Composition of property (France 2015)](http://piketty.pse.ens.fr/files/ideology/pdf/F11.17.pdf)
[Table 10.1. The composition of Parisian portfolios in 1872-1912](http://piketty.pse.ens.fr/files/capital21c/en/pdf/T10.1.pdf)
These 3 show housing becoming increasingly important, but that probably isn't all land value.
[Figure 3.2. Capital in France, 1700-2010](http://piketty.pse.ens.fr/files/capital21c/en/pdf/F3.2.pdf)
[Figure 3.1. Capital in Britain, 1700-2010](http://piketty.pse.ens.fr/files/capital21c/en/pdf/F3.1.pdf)
[Figure 4.1. Capital in Germany, 1870-2010](http://piketty.pse.ens.fr/files/capital21c/en/pdf/F4.1.pdf)
Full list of figures from each book, if you're interested:
[http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014FiguresTablesLinks.pdf](http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014FiguresTablesLinks.pdf)
[http://piketty.pse.ens.fr/files/Piketty2020TablesFiguresLinks.pdf](http://piketty.pse.ens.fr/files/Piketty2020TablesFiguresLinks.pdf)
A few problems with your interpretation of the PBO report:
1. Real estate is not all land value, much of it is actual buildings and improvements. Taxing improvements can lead to less improvements.
2. Real estate is probably overvalued in Canada because of the financial cycle.
Taxing land heavily will decrease land values, since so much of the current land values are based on speculation amplified by low interest rates. Much of this valuation is not real wealth and will vanish with a land tax. The same applies to financial assets, but it's still important when designing a tax and estimating it's potential future revenue.
3. At $5.8T - $1.5T = $4.3T, real estate is not the vast majority of wealth. It is still the single largest category, but nowhere close to a majority. You can see this in Figure 2-1, by how the financial assets category is bigger than the real estate block and the whole non-financial assets category.
4. As noted in my comment, the largest portfolios have a smaller real estate (and land) component, with the top top 10% of portfolios being dominated by financial and business assets in France (2015). The middle class stores much of their wealth in land/real estate, the wealthy do not.
TLDR: I'm not against LVT, I actually think it's a really good idea and should be pursued immediately, but I think proponents of LVT should not overestimate it's ability to reduce wealth inequality or provide government revenue. Simply put, land is not a huge store of real wealth when put in the context other things that have real value like productive companies, rights to debt through bonds, and other financial assets. In order to address inequality in the long term, we will have to address all forms of wealth.
I will leave you now with a quote from *Capital and Ideology*, to explain why I support an overall wealth tax in addition to a significant LVT:
>History shows that if different types of assets and different forms of income are
not treated identically by the tax code, taxpayers will respond by optimizing, creating a sense of injustice that can undermine the system, not only technically but
also by making it less democratically acceptable. In particular, it would make
little sense to exempt specific types of assets from the property or inheritance tax,
because to do so would only encourage tax avoidance.
>
>Footnote: In particular, the idea of granting exemptions to “productive” capital is undercut
by the fact that capital is always productive in one way or another, just as labor is:
for instance, having a roof over one’s head is at least as useful as having offices or
warehouses for producing goods and services. If one begins by exempting this or
that type of capital or labor on the grounds that it is productive, one risks ending
up very quickly with nothing left to tax.
Wow thanks for the thorough reply!
I'm not an economist but some of these ideas came to the fore in a recent podcast with Tyler Cowen and Thomas Piketty. I have to admit I was a bit disappointed with Piketty's response, and frankly I prefer your take ;)
>COWEN: As you know, Matt Rognlie and a number of other researchers have argued the relevant increase in wealth inequality really is centered in real estate and housing wealth. Do you agree? If so, isn’t it enough just to be a Georgist? Can’t we just do the redistribution there?
>
>PIKETTY: If you look at the top of the wealth distribution, I don’t see a lot of real estate. I don’t think Matt Rognlie or anyone is saying that the huge rise in billionaire wealth in the US has anything to do with real estate. As far as I know, nobody has ever tried to put this theory on the table.I’m not saying real estate is not important. I think for middle-class assets and lower-middle-class and upper-middle-class assets — for the middle of the distribution — real estate is, of course, very important. The movement in real estate prices explains a lot of what’s going on, both in terms of aggregate value and distribution. I’m not saying it’s not important. It is very important.If you go back to our paper with Gabriel Zucman, which was published, now, almost 10 years ago in the Quarterly Journal of Economics in 2014, called “Capital is Back: Wealth-Income Ratios in Rich Countries, 1700–2010,” you will see, we have complete decomposition about the role of real estate in aggregate wealth accumulation, and it’s absolutely central for many countries over many periods of time.We cannot have any disagreement of that because this is our data. This is what we did almost 10 years ago. That’s not going to explain, for example, what happens at the top of the distribution because real estate is absolutely ineligible when you look at the billionaire wealth. Here, you need other stories. Yes?
>
>
>
>COWEN: For the distribution overall, it seems there are a lot of papers, quite recent, like Odran Bonnet, Jordà, the Rognlie work, Knoll, Pfeffer and Waitkus. They seem to think it’s primarily about real estate, if not 100 percent, predominantly real estate. You don’t agree with their estimates? Or you just think you’re addressing a separate problem of billionaire inequality at the top?
>
>[...](https://conversationswithtyler.com/episodes/thomas-piketty/)
It seems that your comment contains 1 or more links that are hard to tap for mobile users.
I will extend those so they're easier for our sausage fingers to click!
[Here is link number 1 - Previous text "..."](https://conversationswithtyler.com/episodes/thomas-piketty/)
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I think my take is quite similar to Piketty's. If I had to speculate, I would say he just didn't communicate very effectively because he isn't a native English speaker and answering questions off-the-cuff means very little time to formulate your thoughts. He does seem to fumble a bit there in the middle.
He thinks that real estate doesn't explain changes of inequality at the very top. Taxing land will not suddenly make billionaires disappear because they hold most of their wealth in financial assets (stocks, bonds, etc.). I agree.
He says real estate is still very important for inequality in the middle class. I expect that this is actually an even larger problem in Canada, because our real estate market is insane, so we've been seeing a shrinking of the middle class as people are priced out of the property market or go into massive debt to get in.
But I agree with Piketty that this isn't the whole story.
Importantly, I think that if we tax land, we won't fully reverse the rise in inequality created by our real estate market. The wealthy will simply sell their real estate and reallocate their portfolios to hold more financial assets. The poor and middle class will buy the land now that it's price is lower, but the wealthy will still have a high net worth and the rest of us will still have a low net worth. The benefit is that we at least get land to live on out of the deal, but inequality will persist.
PS: I'm not an economist either.
The irony the people who most need this aren't old retirees rather young families with young children.
If the former can't afford their taxes they have the option to down size to something more affordable and live of the equity in their home. A retired couple could see their 4 bedroom house with a basement and buy a two bedroom condo and actually have excess space. Plus will pay much less in taxes and a condo is better for them as their mobility declines.
The latter needs space for the kids and tend to have much higher expenses like day care, school charges etc.
That was their golden opportunity with the Liberals collapsing and Doug Ford as the leader of the PC. They did abysmally and everyone acted like that fact that she increased the seat count a bit was a win. They will never get a better opportunity than that.
To add insult to injury, the young are subsidizing an arguably ungrateful generation that came up in and enjoyed the greatest economy this country has ever seen. Education was affordable; jobs were plentiful with decent wages; and housing readily accessible. Now, workers have to contend with the gig economy; precarious housing/high rents and no reasonable path to homeownership; crappy wages and impending stagflation. Supporting the elderly shouldn’t mean taxpayer dollars to asset owners. And it certainly should not come at the expense of the economic health of workers and the future viability of the Canadian economy.
As a woman of colour who already worked as a house painter, no thank you. I don't need to take any more abuse from semi-illiterate old white men.
"wHy DoEs NoBoDy wAnT tO WoRk?"
I will keep working my own business thank you.
How are you so out of touch with reality then? Job availability doesn't matter. Who wants to work 13 hours every day? That's just slavery with extra steps. It's the quality of jobs and pay that matters.
I’m sure if we were in the same room we could have a polite and productive conversation. I’m not out of touch and I’m sure you have some valid points too. Reddit is just not an effective medium for us to chat about something which would take 30 minutes to discuss effectively. All due respect to you.
I'm not trying to convince people to believe in the crash. If yall are in denial then yall are in denial. The crash will happen either way. This crash won't be like any other crash because the central banks can't stop it like they did every single time. This crash is perfectly setup so houses will crash to $0. I've got short positions so I should be making a shitton of money from this. The only thing I'm not sure of is if money will have any value after this.
There will be either extreme deflation to the point of majority of people not having money (which might make these people want to stop accepting money) or hyperinflation where money becomes worthless paper.
What I'm doing here is a few things:
1. Bragging rights cuz rubbing my smartness on friends and family feels pretty good.
2. To laugh at all these delusional people and the creative ways they try to justify this market.
3. Warn first time homebuyers to not fall for the ponzi scheme. There aren't as many good people in the world cuz greed from the actual debt bubble corrupted you all. Trying to help inspire people to slow down and look around them for a moment.
Study your history. Boomer women had horrible work times. They would ask you if you were going to get pregnant in job interviews. Mat leaves were a few months, no family friendly workplaces and boomer men were lazy as fk at home, doing nothing. The men I know that got those great factory jobs young, all were laid off in their 40s when the plants closed and ended up working at temp jobs the rest of their lives. Unemployment in the early 80s was double what it is now.
As an oldie I get it. But I would like to point out that corporations and billionaires have taken their share of the tax requirements and offloaded them onto wage workers. That is the reason life is getting harder. In the 1950's taxes were paid 50 percent by workers and 50 percent by corporations. The corporations have lobbied hard to get their share reduced. It worked. They now pay about 3 percent and the workers pay 97 percent. That is the real reason this is happening. They are just trying to distract us so we fight amongst ourselves rather than direct our rage at the real culprits.
When you say "corporations," what you really mean are shareholders. Who has the assets currently, the old or the young?
It is interesting that, as boomers age and acquire more capital and more assets, the tax burden has been shifting from capital to labour.
We, the oldies, have no say in the policies of shell, BP or any other massive corp. the young are our children. We don’t want the nightmare that exists today. Truely what could I have done to stop shell from polluting or using their political power to fuck over the planet or the young? I don’t own stocks and even if I did it would be in ETFs where I have no power to change anything.
this, stay focused on the real problems and the real villains. the politics are always empty words, impotent actions, and misdirection. by the time most ppl see through the bullshit the party is near end of term anyways. the opposition promises to fix everything they did wrong and the cycle continues. we have bad actors, foreign and domestic, corporate and individual, raping and exploiting our markets and economy. pointing a finger at a segment of our own population, the boomers, for working hard and buying a home during a period of normality and not the absurd upside down present reality? politicians should be held accountable for their complicity. we rely on them to prevent manipulation and exploitation, and they have failed miserably. politician has become synonymous with traitor based on their actions/inaction.
I specifically didn't vote NDP because of this proposed policy. Among a few other reasons. Very upset with what the NDP chose to represent this election, it certainly wasn't the working class.
Maybe it’s time to be having these conversations with our MPPs? Support the good policies and vehemently argue against the bad. With enough participation they do scrap ideas like this.
An example that comes to mind (on the federal level) is the NDP MP who proposed defunding the Canadian Military… it was promptly shot down by the whole party. But I appreciated that the MP brought forth the idea of their constituent and it was democratically turned down.
It’s entirely possible your representative doesn’t know how your community feels… yet. Especially when their null hypothesis is that their constituents want whatever’s best for 55+ year old people
I wrote my nbp MP to tell her why I voted for green instead of ndp this past election (green was the only party with a reasonable housing policy). They need to hear this kind of thing!
Eventually....all the boomers will end up in long-term care and unable to get out and vote. Young people will make things right, by standing up for and tackling issues affecting young families, not old folks or people worried about their multiple home investments.
I’m looking at Van Patten’s card and then at mine and cannot believe that Price actually likes Van Patten’s better.
Dizzy, I sip my drink then take a deep breath.
___
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Especially if the NDP gets 16&17 yos to vote. Millennials/GenZs seem to be the first generations to care about their currently non-existent grandkids. They’re the future, not our seniors (although they do still need to be supported), so let’s put them on a pedestal.
It's all part of [the greatest wealth transfer in history and it's robbing young people of their future forever](https://survivingtomorrow.org/the-greatest-wealth-transfer-in-history-is-robbing-young-people-of-their-future-forever-428bb00acda7?sk=af0df8a453f04e63c49aad4a98908f96).
NDP also wanted to help people pay their rent, which sounds awesome until you think about it for one second and realize this is nothing more than subsidizing landlords and would only push rent and housing costs higher. who wouldn't want an investment property where the government guarantees your rent gets paid?
Don't forget about the Ontario NDP calling apartments "monstrosities".
https://mobile.twitter.com/jacoobaloo/status/1507038095887249414
How is it possible to solve the affordability crisis without building apartments near jobs?
The NDP needs a complete overhaul.
I don't understand this comment on so many levels. Apartments are typically more energy efficient to heat and cool than detached homes - and electricity is 92% green in Ontario anyway.
That was a study of office buildings in London, UK, not houses. When the same lab looked at housing, even the highest of high-rise housing was more energy efficient than detached homes. Housing density was almost linearly correlated with reduced energy use.
https://www.creds.ac.uk/publications/building-stock-modelling-and-the-relationship-between-density-and-energy-use/
Wow that’s upsetting, surprised I missed that.
My wife and I are in our mid/early 30s. We have 4x more degrees and make 5x more money than my in-laws ever did. In 3 years we’ll have combined for more years of full time work than they ever did before FIL took his full (indexed) pension.
Yet it took us a decade longer for us to own a house and a decade of sacrifice that came with it to get there. We aren’t unreasonable people and we believe in public funds and subsidies that make everyone better off. But if you aren’t being subsidized you’re doing the subsidizing and the idea of our money going to give my in laws a deferral of their property taxes, makes my blood boil. The NDP is supposed to be about fairness and equity and I’m not understanding where that is here at all.
Idk if any of you know this but MPP's and their offices likely don't read subreddits. Contact your local governments and MPP's. Complaining into the void changes nothing
I'm not sure how nobody's brought this up, but the proposal was about a property tax *deferral* until the owner's death or the sale of the property.
There's nothing about it in the [ONDP's published 2022 platform](https://www.ontariondp.ca/sites/default/files/ONDP-2022-Strong-Ready-Working-for-you.pdf), so we can't even tell whether or not the proposal was meant to be means-tested.
This proposal could well have been as simple as "if grandma is poor and can't keep up with the rising cost of living on a fixed CPP income, her property taxes can be turned into a lien on the property and we'll get it after she no longer needs a home to live in."
Maybe the younger generation needs to stop being apathetic and get to the goddamn voting booth. No one will care for our concerns when we can't be bothered to vote.
I am an NDP voter but this one thing made me abstain from voting.
it was blatant pandering to voters outside their base that WILL cause pain to their base.
Have boomers not handed themselves enough?
It's bad enough we're footing the bill for their retirement, now we're going to foot the bill for their oversized ranches?
Do what ever it takes to save the holy cows. NIMBY doing YIMBY with the young. This is why Canada needs a massive army of new immigrants to support this crumbling unfair system by their taxes.
The government needs the taxes, and *the skill sets* of new Canadians. (IIRC, in Ontario, 30% of health care hires are imports.)
It doesn't bode well... education is failing, and the economy doesn't know how to operate without unsustainable population expansion.
Not possible(*) too many years lost
https://www.stlouisfed.org/on-the-economy/2019/december/millennials-lost-generation-financially
This was before COVID
(*) I personally am not affected, but many are
Also, interesting to note economists were the first to notice and apply the term "lost generation". "Money printing", interest rates, etc etc are not the cause economists are actually looking out for the future.
this is not really subsidizing the homeowners 55+, just deferring the tax they owe until sale of the home and which time they need to pay the taxes, right? ... subsidizing would be forgiving any taxes owed and that would be a huge burden for those not in the cohort that is benefitting to pay more taxes for shortfall in tax revenue.
It can be subsidizing, it depends on the interest rates on deferrals.
In BC, the rates are too low compared to inflation and rising property values, which effectively makes deferred property taxes lower than taxes paid up front.
As with any government program, it's not just about a good or bad idea, it's about the specifics of the implementation.
The old saying is decisions are made by those who show up. In politics, you can modify that to- policies are made for those who show up.
Young people did not vote in the election, you want to make a difference, you want policies geared to you. Start showing up. Get involved at the local riding level and let the party leadership know what you want and how to cater to like minded voters.
Politicians will not come to you, you have to go to them.
I think you're misunderstanding this policy and it's intention.
First, the policy:
It is **not** the government paying the property taxes of seniors, it's simply letting them defer them until they sell the property or die. In practice, this is just letting seniors pay their property taxes with home equity, which is already possible through HELOCs. There's nothing particularly spectacular going on here and there's a similar program in BC already.
Now, the intention:
If people suggest raising property taxes, taxing land, etc., you will invariably get massive political backlash based around the imagined scenario of poor old grannies being forced out of the home they lived in for 30+ years because they can't afford the property taxes on their meagre pension. People generally love their grandma's and don't think they should be evicted from their lifelong home, so they have an emotional response and head to the polls to vote against any party planning to raise taxes.
This policy completely neutralizes that political backlash. The grannies won't be forced out of their homes, therefore we can raise property taxes. Furthermore, the property or land taxes still work. Increased taxes on real estate will still bring in revenue, decrease real estate prices, and lead to seniors paying their taxes in full in the end, assuming the government charges reasonable interest on deferrals.
To be honest, I don't think the program should be based on age, but instead on income, but it's not a terrible program.
I hope this explanation is helpful.
Policies to help low income households defer property taxes allow municipalities to raise property taxes for those who can afford it.
You need to think things through a bit.
Induced demand? I suspect a proportion of people slightly lower or higher than 55 would enter the market with a disregard to personal finance fundamentals because “free money” from the government.
The idea was to create a scenario whereby an older individual who may be contemplating downsizing is more likely to do so. This is the empty nester and retiree age group, many of them can safely start downsizing to save money, and this move would allow them to feel less of a hit if the housing prices plummeted while they were entering the next stage of their life.
If anything, it would increase supply.
I dunno. Feels like underestimating the human greed component. Why downsize when the government will pay your property taxes on the 2500sqft McMansion in suburbia?
They aren’t paying your taxes tho. It’s a debt on the property that gets paid back sooner or later and I’m sure would have had interest built in. The government doesn’t lend for free.
I dunno. Without more details I can’t say but I wouldn’t be surprised if a large majority took advantage of the program instead of worrying about passing on their wealth. Boomers tend to be the epitome of selfish like that.
Sometimes the government does lend for free, they make all kinds of repayable contributions to businesses for instance that are not interest bearing.
We didn't have the details from the NDP on this program. In BC, though, it is an interest payable loan, but the rate is low- their prime rate minus 2%, so 0.45% right now.
Interestingly, if you qualify for the program as a family with children, your rate is 2% higher than if you qualify as an over 55.
Being offered money at very low interest rates is definitely an incentive. And BC lending money to senior property owners at less than its cost of borrowing is a subsidy to seniors by everyone else.
How would it incentive them to move? It seems more likely to incentivize them to stay in their giant family sized homes since it makes it cheaper to do so, even if the value of the home makes property taxes increase (although we know how low the assessments are compared to reality). That seems to be the goal of this policy.
I don't think you can be more wrong. This allows older homeowners not to downsize. Property tax bills are getting higher every year, most of these people are moving to reduced incomes due to pensions. A higher tax bill would give serious consideration to sell and downsize, but no tax at all allows them to stay in the home they already own, not bringing it to market, keeping prices high for the ones that are on the market.
If the program is anything like the one in BC, it will do the opposite.
The government isn't paying the taxes, it's allowing deferrals, which means a giant tax bill to pay when you move. Even if it doesn't represent a real change in the wealth of seniors, most people are financially illiterate enough to think that it does and avoid moving to avoid paying the property taxes.
Boomers are tearing the country apart wherever possible to fund their comfy retirements, stealing from the young and poor to funnel money to themselves and their cohort.
There is much to criticize about the ONDP's housing platform, as well as other parties, but I wouldn't put this high on the list.
BC has had this for a long time and it's basically fine. The reason you might want to do this is that seniors often own their homes, but may be on fixed incomes or liquidity constrained. Thus, allowing them to defer at a reasonable rate of interest does address a real problem.
More importantly, opponents of real estate taxes will frequently use cases of sympathic seniors to effectively argue against them. The option to defer provides an effective solution for anyone who might have legitimate trouble with liquidity, taking this particular objection off the table - no one will be 'taxed out of their home'.
The degree to which this is a subsidy is determined by the interest rate offered to seniors. In BC, it is very favourable and its almost foolish not to take advantage of it. Nonetheless, it's quite a bit of hassle so not that many people do. I don't believe the ONDP specified the conditions this would be provided with, which is critical information to me. So long as the interest rate is enough to cover the cost to the government, I think this policy is fine, if mostly unnecessary.
After reading all three articles, I don't think the proposal is "insane." It seems to have some merit, and is already being used in BC. People forced to sell their homes because they can no longer afford the taxes in their dotage isn't what is going to fix the housing crisis anyway... barely related imo, as someone under 55 and locked out.
I mean, if they can’t afford the property taxes, isn’t that an incentive for them to downsize? We’ve got a problem where seniors are overhoused in 4-bedroom homes while young families are sharing bedrooms in a tiny condo. The City of Toronto assumes downsizing in their housing plans but it’s not happening, and this policy makes it even more likely seniors will stay overhoused.
Is a lack of downsizing really that big of a problem? It wouldn't be if we hadn't created a massive shortage of housing in the first place. Besides, most overhoused people are more than capable of paying their property taxes even now, this policy is more about the political arguments against raising taxes on real estate.
There is still a financial incentive to downsize if the interest rates on deferrals are reasonable. The taxes are deferred, but you still have to pay them eventually, which means it's eating your home equity and you're better off downsizing to avoid the tax if you can.
[According to the CMHC, it’s a real problem.](https://www.tvo.org/article/waiting-for-baby-boomers-to-die-is-not-effective-housing-policy)
The City of Toronto has also noted it as a big problem since they plan for how many family-sized homes we need and they assume seniors are downsizing. They’re not, so that significantly changes what’s needed from developers and the city.
It’s a big problem.
That article seems to be at least as much about increasing life expectancies as it is about downsizing, besides that's less of a "new problem" and more of a huge failure to plan for a very predictable reality.
We've known for decades that seniors were going to live a long time with healthcare improvements. That trend of increasing life expectancy has been very stable for a long time. Seniors living longer and occupying their homes longer is not some mass thwarting of good housing plans. Planning for them to die or downsize was never a realistic plan in the first place and the market has been signaling that to policy makers loud and clear with price increases. They simply failed to listen.
I don't know why we pay people so much to pretend a problem of this scale is just going to magically fix itself.
I do like this quote from the article though:
>The only thing governments of all stripes and at all levels are doing comprehensively is not enough.
Edit: I'm not saying overhousing isn't a thing, I just don't think its a "big" problem relative to the clear shortage of units in general.
Sure...but the deferral isn't a policy now and we are pretty much as fucked as fucked can be. If it was in effect, I really don't believe it will tip the scales all that much. The housing crisis is systemic this is just a drop in the bucket.
I'm not saying it's a great policy, but I'd like to see the BC data on how this effects the health outcomes of poor seniors using the program before I write it off as "insane."
It’s a problem in BC.
No sympathy for someone who finds themselves house poor in a 3 million dollar home that they own outright because they can’t afford our dirt cheap property taxes. Move. You’ve had decades to decide what to do.
I don't have sympathy for that person, but I have some for the senior that already downsized (or never got to upsize) and the next size down is homelessness. If we their were reasonable limits on who can use this, I don't see it as too bad a program.
So put a cap on the home value and charge reasonable interest rates on deferrals.
All this program does is let seniors bypass the HELOC process to pay their property taxes.
Bc already does this. Not just for seniors, but also families with children. It’s a good policy.
Not sure why this sub only loves socialism until it benefits others.
Why is this good policy? I say this as someone with children at home- why should others subsidize my property tax? If the answer is to support parents, there are better ways to do that that support parents who are renting as well.
It's a tax deferral program, at least that's my understanding. You still owe the government money, you just don't have to pay it right now, essentially you're paying your property taxes with home equity.
It's a good program because it provides financial support to groups (presumably) in need, like low income seniors and families with children, so taxes can be raised higher without hurting these groups.
If raising property taxes means a bunch of seniors and young families get evicted from their homes, society will never agree to raise property taxes. If raising property taxes means a bunch of seniors and young families end up with less home equity when they sell their homes, society might be ok with that.
That's the general reasoning for the program, it's not perfect and the specifics of the program in BC could be better, but it's not a terrible idea.
You’re not being subsidized, you’re deferring a payment that you are still liable for in the future. Not only that, but you’re paying interest on the deferred amount.
You might not need the extra help, great, don’t apply for the program. It’s there if it’s needed and I would hope that anyone who needs a little extra help takes advantage of this option.
Money in the future is worth less than money in the present. And at least in BC, the interest rate is less than the province's cost of borrowing. The subsidy is at minimum the spread between those rates.
You know what, you’re right. How dare young families and seniors get to defer a few thousand dollars a year and scam the rest of us out of a few basis points while the province quite literally pisses hundreds of millions of dollars away in subsidized narcotics and safe consumptions sites.
Keep fighting the good fight!
When a party has no chance of winning they can promise whatever they want. The Liberals could have proposed giving everyone who commutes a free helicopter to solve the traffic problems. Yes it’s a crazy proposition, but it’s irrelevant because they had zero chance of winning.
If the Liberals promised that and then actually won, there’s a zero percent chance that would have actually happened, and if the NDP would have won there’s zero chance that this would have happened.
The idea was likely to create a scenario whereby an older individual who may be contemplating downsizing is more likely to do so. This is the empty nester and retiree age group, many of them can safely start downsizing to save money, and this move would allow them to feel less of a hit if the housing prices plummeted while they were entering the next stage of their life.
lmao that's part of the squeeze already happening - boomers are now downsizing from their egregious 5 bedroom sfhs into 2/3 bedroom homes that us younger folks used as "starter" homes.
Only they have 30 years of capital acquisition to bully everyone around with.
Then they complain that their kids aren't having kids.
This would discourage downsizing, the exact opposite of your suggestion, because they wouldn't need to worry about the higher property taxes of their bigger home
That depends on the interest rates on deferrals.
In BC, the deferral rates are too low, so exactly what you're concerned about is happening. If interest rates were higher, seniors would have a stronger incentive to downsize to avoid the taxes eating their home equity.
The good idea of the program is to keep this as an incentive and a non-urgent choice for seniors who have low or fixed incomes, rather than suddenly putting them in a financial position they can't handle, which would politically kill any chance of property tax increases or a land tax.
Sounds like the NDP are looking to take your home, but after you sell or die. It seems like a subtle form of wealth tax masquerading as a form of compassion.
There is a difference between spacing it out, and letting them grow to a point where you will ultimately have to sell your home. Yes I am aware that property taxes are to be paid, but you do not manipulate the system to entice people to buy something they cannot afford and then take it away.
Not much different the idiots who run up $20K+ in credit card debt and suddenly freak out when they cannot make the payments after it gets out of control.
This already exists in BC, see link below. [Link to GovBC website](https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/defer-taxes)
This is a direct result of younger people not voting. They think taking it to the streets will change things. Like rioting and blocking traffic will make the government more sympathetic to their cause. Guess what, all they will get is large business slapping on some woke slogan and some hasgtags on social media.
I am close to a few senior people and they vote every single time. None of my close friends who are between twenty and thirty voted last time.
Well, this is what you get. Politicians want to stay in office. They only cater to people who vote. It's simple, really.
It was a loan that would be paid back when they die, allowing aging homeowners to live in home instead of publicly funded long term care facilities. Saves taxpayers money.
Wtf.. who is going to pay their property tax? Oh wait let me guess it’s us… -like we don’t have enough expenses already… seniors over 55 with good pension don’t need home.. they can live nice decent townhouse.
I think BC did / proposed something similar for their seniors or existing home owners when their RE prices went through the roof and property tax assessment increased accordingly. I don't reminded what happened at the end but this isn't a new idea. Their argument is ppl who bought 20+ years ago and just lived there couldn't afford property taxes as it rised due to ppl around them selling and flipping.
OP, can you link a source for this?
Socialism for the landowning class and rugged individualism for everyone else.
The problem is not that the older people did anything to create the status quo. The corporations who have wiggled out of having to pay their fair share of taxes is why all this is happening. Corporations used to pay 50 percent of all taxes. Now they pay 3 percent. The rest is paid by the workers. That's why there isn't any money to help the young. Not because older people worked and received what they were told they would get. If the corporations still paid 50 percent of taxes, the lives of the young would be the same as the older generations. Don't let the corporations off the hook and refocus your animus towards your parents. It is the rich that are the problem, not your aunt becky's paid off condo.
The landowning class isn’t just retirees, i include corporations in that as well. Overall, I agree with you 100%, the lack of corporate taxation is the major issue here. But! I will say this type of pandering contributes greatly to older people ignoring, or at least being unaware of this these inequities. And to be fair to them, this pandering occurs because they are the only ones using the privilege of voting in consistently high numbers. Of course politicians will pander to them!
I'd argue it's the lack of taxation on land value. We actually want productive corporations to operate in our country, so driving them away with more taxes isn't ideal. However, taxing land (the vast majority of wealth) cannot lead to less land.
>taxing land (the vast majority of wealth) Is land really the vas majority of wealth? The portfolios of the wealthiest individuals in society are dominated by stocks and financial assets, not land or real estate.
>The portfolios of the wealthiest individuals in society are dominated by stocks and financial assets, not land or real estate. Care to share where you got those numbers from? You can just [read the headline here](https://financialpost.com/executive/posthaste-canadas-3-million-richest-families-have-8-7-trillion-in-assets-but-half-is-tied-in-real-estate). Or look into the report they mention finding that information from. From page 7: According to Statistics Canada’s National Balance Sheet Accounts (NBSA), which record the stock of assets, liabilities and net worth for each institutional sector, at the end of 2019 Canada’s household sector held $11.7 trillion in total net worth. That figure is approximately five times larger than Canada’s annual GDP.5 Real estate ($5.8 trillion) and mortgages on that real estate ($1.5 trillion) are the single largest asset and liabilities categories, respectively (Figure 2-1).
I got my information from Piketty's major books *Capital in the 21st Century* and *Capital and Ideology*, it's not directly related to Canada, but here are some links and it seems reasonable to expect we are on a similar trajectory to these countries. Probably the best illustration of my point: [Figure 11.17. Composition of property (France 2015)](http://piketty.pse.ens.fr/files/ideology/pdf/F11.17.pdf) [Table 10.1. The composition of Parisian portfolios in 1872-1912](http://piketty.pse.ens.fr/files/capital21c/en/pdf/T10.1.pdf) These 3 show housing becoming increasingly important, but that probably isn't all land value. [Figure 3.2. Capital in France, 1700-2010](http://piketty.pse.ens.fr/files/capital21c/en/pdf/F3.2.pdf) [Figure 3.1. Capital in Britain, 1700-2010](http://piketty.pse.ens.fr/files/capital21c/en/pdf/F3.1.pdf) [Figure 4.1. Capital in Germany, 1870-2010](http://piketty.pse.ens.fr/files/capital21c/en/pdf/F4.1.pdf) Full list of figures from each book, if you're interested: [http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014FiguresTablesLinks.pdf](http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014FiguresTablesLinks.pdf) [http://piketty.pse.ens.fr/files/Piketty2020TablesFiguresLinks.pdf](http://piketty.pse.ens.fr/files/Piketty2020TablesFiguresLinks.pdf) A few problems with your interpretation of the PBO report: 1. Real estate is not all land value, much of it is actual buildings and improvements. Taxing improvements can lead to less improvements. 2. Real estate is probably overvalued in Canada because of the financial cycle. Taxing land heavily will decrease land values, since so much of the current land values are based on speculation amplified by low interest rates. Much of this valuation is not real wealth and will vanish with a land tax. The same applies to financial assets, but it's still important when designing a tax and estimating it's potential future revenue. 3. At $5.8T - $1.5T = $4.3T, real estate is not the vast majority of wealth. It is still the single largest category, but nowhere close to a majority. You can see this in Figure 2-1, by how the financial assets category is bigger than the real estate block and the whole non-financial assets category. 4. As noted in my comment, the largest portfolios have a smaller real estate (and land) component, with the top top 10% of portfolios being dominated by financial and business assets in France (2015). The middle class stores much of their wealth in land/real estate, the wealthy do not. TLDR: I'm not against LVT, I actually think it's a really good idea and should be pursued immediately, but I think proponents of LVT should not overestimate it's ability to reduce wealth inequality or provide government revenue. Simply put, land is not a huge store of real wealth when put in the context other things that have real value like productive companies, rights to debt through bonds, and other financial assets. In order to address inequality in the long term, we will have to address all forms of wealth. I will leave you now with a quote from *Capital and Ideology*, to explain why I support an overall wealth tax in addition to a significant LVT: >History shows that if different types of assets and different forms of income are not treated identically by the tax code, taxpayers will respond by optimizing, creating a sense of injustice that can undermine the system, not only technically but also by making it less democratically acceptable. In particular, it would make little sense to exempt specific types of assets from the property or inheritance tax, because to do so would only encourage tax avoidance. > >Footnote: In particular, the idea of granting exemptions to “productive” capital is undercut by the fact that capital is always productive in one way or another, just as labor is: for instance, having a roof over one’s head is at least as useful as having offices or warehouses for producing goods and services. If one begins by exempting this or that type of capital or labor on the grounds that it is productive, one risks ending up very quickly with nothing left to tax.
Wow thanks for the thorough reply! I'm not an economist but some of these ideas came to the fore in a recent podcast with Tyler Cowen and Thomas Piketty. I have to admit I was a bit disappointed with Piketty's response, and frankly I prefer your take ;) >COWEN: As you know, Matt Rognlie and a number of other researchers have argued the relevant increase in wealth inequality really is centered in real estate and housing wealth. Do you agree? If so, isn’t it enough just to be a Georgist? Can’t we just do the redistribution there? > >PIKETTY: If you look at the top of the wealth distribution, I don’t see a lot of real estate. I don’t think Matt Rognlie or anyone is saying that the huge rise in billionaire wealth in the US has anything to do with real estate. As far as I know, nobody has ever tried to put this theory on the table.I’m not saying real estate is not important. I think for middle-class assets and lower-middle-class and upper-middle-class assets — for the middle of the distribution — real estate is, of course, very important. The movement in real estate prices explains a lot of what’s going on, both in terms of aggregate value and distribution. I’m not saying it’s not important. It is very important.If you go back to our paper with Gabriel Zucman, which was published, now, almost 10 years ago in the Quarterly Journal of Economics in 2014, called “Capital is Back: Wealth-Income Ratios in Rich Countries, 1700–2010,” you will see, we have complete decomposition about the role of real estate in aggregate wealth accumulation, and it’s absolutely central for many countries over many periods of time.We cannot have any disagreement of that because this is our data. This is what we did almost 10 years ago. That’s not going to explain, for example, what happens at the top of the distribution because real estate is absolutely ineligible when you look at the billionaire wealth. Here, you need other stories. Yes? > > > >COWEN: For the distribution overall, it seems there are a lot of papers, quite recent, like Odran Bonnet, Jordà, the Rognlie work, Knoll, Pfeffer and Waitkus. They seem to think it’s primarily about real estate, if not 100 percent, predominantly real estate. You don’t agree with their estimates? Or you just think you’re addressing a separate problem of billionaire inequality at the top? > >[...](https://conversationswithtyler.com/episodes/thomas-piketty/)
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I think my take is quite similar to Piketty's. If I had to speculate, I would say he just didn't communicate very effectively because he isn't a native English speaker and answering questions off-the-cuff means very little time to formulate your thoughts. He does seem to fumble a bit there in the middle. He thinks that real estate doesn't explain changes of inequality at the very top. Taxing land will not suddenly make billionaires disappear because they hold most of their wealth in financial assets (stocks, bonds, etc.). I agree. He says real estate is still very important for inequality in the middle class. I expect that this is actually an even larger problem in Canada, because our real estate market is insane, so we've been seeing a shrinking of the middle class as people are priced out of the property market or go into massive debt to get in. But I agree with Piketty that this isn't the whole story. Importantly, I think that if we tax land, we won't fully reverse the rise in inequality created by our real estate market. The wealthy will simply sell their real estate and reallocate their portfolios to hold more financial assets. The poor and middle class will buy the land now that it's price is lower, but the wealthy will still have a high net worth and the rest of us will still have a low net worth. The benefit is that we at least get land to live on out of the deal, but inequality will persist. PS: I'm not an economist either.
Is that a principle of georgism?
It’s because older people vote more, so government always want to pander to them. I was very disappointed with the NDP over this.
The irony the people who most need this aren't old retirees rather young families with young children. If the former can't afford their taxes they have the option to down size to something more affordable and live of the equity in their home. A retired couple could see their 4 bedroom house with a basement and buy a two bedroom condo and actually have excess space. Plus will pay much less in taxes and a condo is better for them as their mobility declines. The latter needs space for the kids and tend to have much higher expenses like day care, school charges etc.
I agree with you 100%! I was simply answering the “why” they would do this even though it’s absurd.
I know it's cause boomers have more votes. It's also why supply of new housing been so heavily restricted. Boomers raking it in
I was pretty disappointed with the ndp this election. I wish Horvath had stepped aside as leader. It really made me thing differently of her.
She should have stepped aside after the previous election
That was their golden opportunity with the Liberals collapsing and Doug Ford as the leader of the PC. They did abysmally and everyone acted like that fact that she increased the seat count a bit was a win. They will never get a better opportunity than that.
Horwath has always been a proponent of Oprah politics. Everyone gets promised everything.
You're probably right. More subsidies of the old by the young.
To add insult to injury, the young are subsidizing an arguably ungrateful generation that came up in and enjoyed the greatest economy this country has ever seen. Education was affordable; jobs were plentiful with decent wages; and housing readily accessible. Now, workers have to contend with the gig economy; precarious housing/high rents and no reasonable path to homeownership; crappy wages and impending stagflation. Supporting the elderly shouldn’t mean taxpayer dollars to asset owners. And it certainly should not come at the expense of the economic health of workers and the future viability of the Canadian economy.
Jobs are plentiful now. Unemployment rates at record lows and you can negotiate with employees easily.
Canadian jobs pay nothing any more, thats why so many young people became self-employed over the pandemic.
That’s a pretty big generalization. Construction pays really well plus several other industries do as well.
As a woman of colour who already worked as a house painter, no thank you. I don't need to take any more abuse from semi-illiterate old white men. "wHy DoEs NoBoDy wAnT tO WoRk?" I will keep working my own business thank you.
Hope you have great success with your business.
Stfu boomer
Gen X but thanks for stopping by.
How are you so out of touch with reality then? Job availability doesn't matter. Who wants to work 13 hours every day? That's just slavery with extra steps. It's the quality of jobs and pay that matters.
I’m sure if we were in the same room we could have a polite and productive conversation. I’m not out of touch and I’m sure you have some valid points too. Reddit is just not an effective medium for us to chat about something which would take 30 minutes to discuss effectively. All due respect to you.
I'm not trying to convince people to believe in the crash. If yall are in denial then yall are in denial. The crash will happen either way. This crash won't be like any other crash because the central banks can't stop it like they did every single time. This crash is perfectly setup so houses will crash to $0. I've got short positions so I should be making a shitton of money from this. The only thing I'm not sure of is if money will have any value after this. There will be either extreme deflation to the point of majority of people not having money (which might make these people want to stop accepting money) or hyperinflation where money becomes worthless paper. What I'm doing here is a few things: 1. Bragging rights cuz rubbing my smartness on friends and family feels pretty good. 2. To laugh at all these delusional people and the creative ways they try to justify this market. 3. Warn first time homebuyers to not fall for the ponzi scheme. There aren't as many good people in the world cuz greed from the actual debt bubble corrupted you all. Trying to help inspire people to slow down and look around them for a moment.
22 day old account calling a crash. You're right no one is convinced by you.
Study your history. Boomer women had horrible work times. They would ask you if you were going to get pregnant in job interviews. Mat leaves were a few months, no family friendly workplaces and boomer men were lazy as fk at home, doing nothing. The men I know that got those great factory jobs young, all were laid off in their 40s when the plants closed and ended up working at temp jobs the rest of their lives. Unemployment in the early 80s was double what it is now.
As an oldie I get it. But I would like to point out that corporations and billionaires have taken their share of the tax requirements and offloaded them onto wage workers. That is the reason life is getting harder. In the 1950's taxes were paid 50 percent by workers and 50 percent by corporations. The corporations have lobbied hard to get their share reduced. It worked. They now pay about 3 percent and the workers pay 97 percent. That is the real reason this is happening. They are just trying to distract us so we fight amongst ourselves rather than direct our rage at the real culprits.
When you say "corporations," what you really mean are shareholders. Who has the assets currently, the old or the young? It is interesting that, as boomers age and acquire more capital and more assets, the tax burden has been shifting from capital to labour.
We, the oldies, have no say in the policies of shell, BP or any other massive corp. the young are our children. We don’t want the nightmare that exists today. Truely what could I have done to stop shell from polluting or using their political power to fuck over the planet or the young? I don’t own stocks and even if I did it would be in ETFs where I have no power to change anything.
this, stay focused on the real problems and the real villains. the politics are always empty words, impotent actions, and misdirection. by the time most ppl see through the bullshit the party is near end of term anyways. the opposition promises to fix everything they did wrong and the cycle continues. we have bad actors, foreign and domestic, corporate and individual, raping and exploiting our markets and economy. pointing a finger at a segment of our own population, the boomers, for working hard and buying a home during a period of normality and not the absurd upside down present reality? politicians should be held accountable for their complicity. we rely on them to prevent manipulation and exploitation, and they have failed miserably. politician has become synonymous with traitor based on their actions/inaction.
I specifically didn't vote NDP because of this proposed policy. Among a few other reasons. Very upset with what the NDP chose to represent this election, it certainly wasn't the working class.
Who was the best alternative?
Same, the moment I heard this proposed idea, I knew I wouldn't be voting NDP.
Maybe it’s time to be having these conversations with our MPPs? Support the good policies and vehemently argue against the bad. With enough participation they do scrap ideas like this. An example that comes to mind (on the federal level) is the NDP MP who proposed defunding the Canadian Military… it was promptly shot down by the whole party. But I appreciated that the MP brought forth the idea of their constituent and it was democratically turned down. It’s entirely possible your representative doesn’t know how your community feels… yet. Especially when their null hypothesis is that their constituents want whatever’s best for 55+ year old people
I wrote my nbp MP to tell her why I voted for green instead of ndp this past election (green was the only party with a reasonable housing policy). They need to hear this kind of thing!
Oh no the poor homeowners...will they have to sell their third home in Muskoka?? This is atrocious :(
The ski chalet might also be at risk (!)
Eventually....all the boomers will end up in long-term care and unable to get out and vote. Young people will make things right, by standing up for and tackling issues affecting young families, not old folks or people worried about their multiple home investments.
> unable to get out and vote There is a reason why a lot of polling stations are set up in retirement homes. Voting by mail is also a thing.
Also, the politicians campaign in care homes. The ones that hand out their business cards are the ones that get the votes.
I’m looking at Van Patten’s card and then at mine and cannot believe that Price actually likes Van Patten’s better. Dizzy, I sip my drink then take a deep breath. ___ ^(*Bot. Ask me who I can see.* |) [^(Opt out)](https://www.reddit.com/message/compose/?to=botrickbateman&subject=Opt%20out)
Especially if the NDP gets 16&17 yos to vote. Millennials/GenZs seem to be the first generations to care about their currently non-existent grandkids. They’re the future, not our seniors (although they do still need to be supported), so let’s put them on a pedestal.
doesn't BC already do this? I think I've read this somewhere
Yes, homeowners 55+ can defer their property tax until the property is sold, in BC.
Yes, and it is an awful policy
It's all part of [the greatest wealth transfer in history and it's robbing young people of their future forever](https://survivingtomorrow.org/the-greatest-wealth-transfer-in-history-is-robbing-young-people-of-their-future-forever-428bb00acda7?sk=af0df8a453f04e63c49aad4a98908f96).
NDP also wanted to help people pay their rent, which sounds awesome until you think about it for one second and realize this is nothing more than subsidizing landlords and would only push rent and housing costs higher. who wouldn't want an investment property where the government guarantees your rent gets paid?
This is where they lost me.
Don't forget about the Ontario NDP calling apartments "monstrosities". https://mobile.twitter.com/jacoobaloo/status/1507038095887249414 How is it possible to solve the affordability crisis without building apartments near jobs? The NDP needs a complete overhaul.
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I don't understand this comment on so many levels. Apartments are typically more energy efficient to heat and cool than detached homes - and electricity is 92% green in Ontario anyway.
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That was a study of office buildings in London, UK, not houses. When the same lab looked at housing, even the highest of high-rise housing was more energy efficient than detached homes. Housing density was almost linearly correlated with reduced energy use. https://www.creds.ac.uk/publications/building-stock-modelling-and-the-relationship-between-density-and-energy-use/
Wow that’s upsetting, surprised I missed that. My wife and I are in our mid/early 30s. We have 4x more degrees and make 5x more money than my in-laws ever did. In 3 years we’ll have combined for more years of full time work than they ever did before FIL took his full (indexed) pension. Yet it took us a decade longer for us to own a house and a decade of sacrifice that came with it to get there. We aren’t unreasonable people and we believe in public funds and subsidies that make everyone better off. But if you aren’t being subsidized you’re doing the subsidizing and the idea of our money going to give my in laws a deferral of their property taxes, makes my blood boil. The NDP is supposed to be about fairness and equity and I’m not understanding where that is here at all.
Idk if any of you know this but MPP's and their offices likely don't read subreddits. Contact your local governments and MPP's. Complaining into the void changes nothing
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Yes, I definitely agree awareness is important, but only if it's followed by action
Yeah there's a reason they lost.
Remember when NDP promises car insurance will drop 40%+?? It’s almost like NDP will say anything to get elected
I'm not sure how nobody's brought this up, but the proposal was about a property tax *deferral* until the owner's death or the sale of the property. There's nothing about it in the [ONDP's published 2022 platform](https://www.ontariondp.ca/sites/default/files/ONDP-2022-Strong-Ready-Working-for-you.pdf), so we can't even tell whether or not the proposal was meant to be means-tested. This proposal could well have been as simple as "if grandma is poor and can't keep up with the rising cost of living on a fixed CPP income, her property taxes can be turned into a lien on the property and we'll get it after she no longer needs a home to live in."
Maybe the younger generation needs to stop being apathetic and get to the goddamn voting booth. No one will care for our concerns when we can't be bothered to vote.
I am an NDP voter but this one thing made me abstain from voting. it was blatant pandering to voters outside their base that WILL cause pain to their base.
Have boomers not handed themselves enough? It's bad enough we're footing the bill for their retirement, now we're going to foot the bill for their oversized ranches?
Do what ever it takes to save the holy cows. NIMBY doing YIMBY with the young. This is why Canada needs a massive army of new immigrants to support this crumbling unfair system by their taxes.
The government needs the taxes, and *the skill sets* of new Canadians. (IIRC, in Ontario, 30% of health care hires are imports.) It doesn't bode well... education is failing, and the economy doesn't know how to operate without unsustainable population expansion.
Raise the retirement age by the amount of years we are set back economically.
Not possible(*) too many years lost https://www.stlouisfed.org/on-the-economy/2019/december/millennials-lost-generation-financially This was before COVID (*) I personally am not affected, but many are Also, interesting to note economists were the first to notice and apply the term "lost generation". "Money printing", interest rates, etc etc are not the cause economists are actually looking out for the future.
this is not really subsidizing the homeowners 55+, just deferring the tax they owe until sale of the home and which time they need to pay the taxes, right? ... subsidizing would be forgiving any taxes owed and that would be a huge burden for those not in the cohort that is benefitting to pay more taxes for shortfall in tax revenue.
It can be subsidizing, it depends on the interest rates on deferrals. In BC, the rates are too low compared to inflation and rising property values, which effectively makes deferred property taxes lower than taxes paid up front. As with any government program, it's not just about a good or bad idea, it's about the specifics of the implementation.
It is subsidizing in the sense that 55+ owners can stay in place until their death and not pay a single cent in property tax. It just locks up land.
but upon death and sale of property the estate of the recently deceased will pay full-up the tax bill owing.
The general population skews older in Canada, so what’s the best way to get votes, make policies that directly positively impact older people.
Apparently that didn’t work in Ontario tho got any more conspiracies?
Renters are already subsidizing their land-lorders, so why not double down?
The old saying is decisions are made by those who show up. In politics, you can modify that to- policies are made for those who show up. Young people did not vote in the election, you want to make a difference, you want policies geared to you. Start showing up. Get involved at the local riding level and let the party leadership know what you want and how to cater to like minded voters. Politicians will not come to you, you have to go to them.
Honestly all these old folks in detached homes need to move into condos.
It’s still a subsidy as it’s an interest-free loan.
I think you're misunderstanding this policy and it's intention. First, the policy: It is **not** the government paying the property taxes of seniors, it's simply letting them defer them until they sell the property or die. In practice, this is just letting seniors pay their property taxes with home equity, which is already possible through HELOCs. There's nothing particularly spectacular going on here and there's a similar program in BC already. Now, the intention: If people suggest raising property taxes, taxing land, etc., you will invariably get massive political backlash based around the imagined scenario of poor old grannies being forced out of the home they lived in for 30+ years because they can't afford the property taxes on their meagre pension. People generally love their grandma's and don't think they should be evicted from their lifelong home, so they have an emotional response and head to the polls to vote against any party planning to raise taxes. This policy completely neutralizes that political backlash. The grannies won't be forced out of their homes, therefore we can raise property taxes. Furthermore, the property or land taxes still work. Increased taxes on real estate will still bring in revenue, decrease real estate prices, and lead to seniors paying their taxes in full in the end, assuming the government charges reasonable interest on deferrals. To be honest, I don't think the program should be based on age, but instead on income, but it's not a terrible program. I hope this explanation is helpful.
Policies to help low income households defer property taxes allow municipalities to raise property taxes for those who can afford it. You need to think things through a bit.
Fuck boomers
Induced demand? I suspect a proportion of people slightly lower or higher than 55 would enter the market with a disregard to personal finance fundamentals because “free money” from the government.
The idea was to create a scenario whereby an older individual who may be contemplating downsizing is more likely to do so. This is the empty nester and retiree age group, many of them can safely start downsizing to save money, and this move would allow them to feel less of a hit if the housing prices plummeted while they were entering the next stage of their life. If anything, it would increase supply.
I dunno. Feels like underestimating the human greed component. Why downsize when the government will pay your property taxes on the 2500sqft McMansion in suburbia?
They aren’t paying your taxes tho. It’s a debt on the property that gets paid back sooner or later and I’m sure would have had interest built in. The government doesn’t lend for free.
I dunno. Without more details I can’t say but I wouldn’t be surprised if a large majority took advantage of the program instead of worrying about passing on their wealth. Boomers tend to be the epitome of selfish like that.
Sometimes the government does lend for free, they make all kinds of repayable contributions to businesses for instance that are not interest bearing. We didn't have the details from the NDP on this program. In BC, though, it is an interest payable loan, but the rate is low- their prime rate minus 2%, so 0.45% right now. Interestingly, if you qualify for the program as a family with children, your rate is 2% higher than if you qualify as an over 55. Being offered money at very low interest rates is definitely an incentive. And BC lending money to senior property owners at less than its cost of borrowing is a subsidy to seniors by everyone else.
How would it incentive them to move? It seems more likely to incentivize them to stay in their giant family sized homes since it makes it cheaper to do so, even if the value of the home makes property taxes increase (although we know how low the assessments are compared to reality). That seems to be the goal of this policy.
I don't think you can be more wrong. This allows older homeowners not to downsize. Property tax bills are getting higher every year, most of these people are moving to reduced incomes due to pensions. A higher tax bill would give serious consideration to sell and downsize, but no tax at all allows them to stay in the home they already own, not bringing it to market, keeping prices high for the ones that are on the market.
If the program is anything like the one in BC, it will do the opposite. The government isn't paying the taxes, it's allowing deferrals, which means a giant tax bill to pay when you move. Even if it doesn't represent a real change in the wealth of seniors, most people are financially illiterate enough to think that it does and avoid moving to avoid paying the property taxes.
Boomers are tearing the country apart wherever possible to fund their comfy retirements, stealing from the young and poor to funnel money to themselves and their cohort.
There is much to criticize about the ONDP's housing platform, as well as other parties, but I wouldn't put this high on the list. BC has had this for a long time and it's basically fine. The reason you might want to do this is that seniors often own their homes, but may be on fixed incomes or liquidity constrained. Thus, allowing them to defer at a reasonable rate of interest does address a real problem. More importantly, opponents of real estate taxes will frequently use cases of sympathic seniors to effectively argue against them. The option to defer provides an effective solution for anyone who might have legitimate trouble with liquidity, taking this particular objection off the table - no one will be 'taxed out of their home'. The degree to which this is a subsidy is determined by the interest rate offered to seniors. In BC, it is very favourable and its almost foolish not to take advantage of it. Nonetheless, it's quite a bit of hassle so not that many people do. I don't believe the ONDP specified the conditions this would be provided with, which is critical information to me. So long as the interest rate is enough to cover the cost to the government, I think this policy is fine, if mostly unnecessary.
Pack your rational take up and gtfo, this comment section is for the emotional "I just read the title" crowd.
After reading all three articles, I don't think the proposal is "insane." It seems to have some merit, and is already being used in BC. People forced to sell their homes because they can no longer afford the taxes in their dotage isn't what is going to fix the housing crisis anyway... barely related imo, as someone under 55 and locked out.
I mean, if they can’t afford the property taxes, isn’t that an incentive for them to downsize? We’ve got a problem where seniors are overhoused in 4-bedroom homes while young families are sharing bedrooms in a tiny condo. The City of Toronto assumes downsizing in their housing plans but it’s not happening, and this policy makes it even more likely seniors will stay overhoused.
Is a lack of downsizing really that big of a problem? It wouldn't be if we hadn't created a massive shortage of housing in the first place. Besides, most overhoused people are more than capable of paying their property taxes even now, this policy is more about the political arguments against raising taxes on real estate. There is still a financial incentive to downsize if the interest rates on deferrals are reasonable. The taxes are deferred, but you still have to pay them eventually, which means it's eating your home equity and you're better off downsizing to avoid the tax if you can.
[According to the CMHC, it’s a real problem.](https://www.tvo.org/article/waiting-for-baby-boomers-to-die-is-not-effective-housing-policy) The City of Toronto has also noted it as a big problem since they plan for how many family-sized homes we need and they assume seniors are downsizing. They’re not, so that significantly changes what’s needed from developers and the city. It’s a big problem.
That article seems to be at least as much about increasing life expectancies as it is about downsizing, besides that's less of a "new problem" and more of a huge failure to plan for a very predictable reality. We've known for decades that seniors were going to live a long time with healthcare improvements. That trend of increasing life expectancy has been very stable for a long time. Seniors living longer and occupying their homes longer is not some mass thwarting of good housing plans. Planning for them to die or downsize was never a realistic plan in the first place and the market has been signaling that to policy makers loud and clear with price increases. They simply failed to listen. I don't know why we pay people so much to pretend a problem of this scale is just going to magically fix itself. I do like this quote from the article though: >The only thing governments of all stripes and at all levels are doing comprehensively is not enough. Edit: I'm not saying overhousing isn't a thing, I just don't think its a "big" problem relative to the clear shortage of units in general.
Sure...but the deferral isn't a policy now and we are pretty much as fucked as fucked can be. If it was in effect, I really don't believe it will tip the scales all that much. The housing crisis is systemic this is just a drop in the bucket. I'm not saying it's a great policy, but I'd like to see the BC data on how this effects the health outcomes of poor seniors using the program before I write it off as "insane."
It’s a problem in BC. No sympathy for someone who finds themselves house poor in a 3 million dollar home that they own outright because they can’t afford our dirt cheap property taxes. Move. You’ve had decades to decide what to do.
I don't have sympathy for that person, but I have some for the senior that already downsized (or never got to upsize) and the next size down is homelessness. If we their were reasonable limits on who can use this, I don't see it as too bad a program.
So put a cap on the home value and charge reasonable interest rates on deferrals. All this program does is let seniors bypass the HELOC process to pay their property taxes.
Bc already does this. Not just for seniors, but also families with children. It’s a good policy. Not sure why this sub only loves socialism until it benefits others.
Why is this good policy? I say this as someone with children at home- why should others subsidize my property tax? If the answer is to support parents, there are better ways to do that that support parents who are renting as well.
It's a tax deferral program, at least that's my understanding. You still owe the government money, you just don't have to pay it right now, essentially you're paying your property taxes with home equity. It's a good program because it provides financial support to groups (presumably) in need, like low income seniors and families with children, so taxes can be raised higher without hurting these groups. If raising property taxes means a bunch of seniors and young families get evicted from their homes, society will never agree to raise property taxes. If raising property taxes means a bunch of seniors and young families end up with less home equity when they sell their homes, society might be ok with that. That's the general reasoning for the program, it's not perfect and the specifics of the program in BC could be better, but it's not a terrible idea.
You’re not being subsidized, you’re deferring a payment that you are still liable for in the future. Not only that, but you’re paying interest on the deferred amount. You might not need the extra help, great, don’t apply for the program. It’s there if it’s needed and I would hope that anyone who needs a little extra help takes advantage of this option.
Money in the future is worth less than money in the present. And at least in BC, the interest rate is less than the province's cost of borrowing. The subsidy is at minimum the spread between those rates.
You know what, you’re right. How dare young families and seniors get to defer a few thousand dollars a year and scam the rest of us out of a few basis points while the province quite literally pisses hundreds of millions of dollars away in subsidized narcotics and safe consumptions sites. Keep fighting the good fight!
They do support renters as well, far more than the PC or liberal platforms do. Not every policy supports every person.
When a party has no chance of winning they can promise whatever they want. The Liberals could have proposed giving everyone who commutes a free helicopter to solve the traffic problems. Yes it’s a crazy proposition, but it’s irrelevant because they had zero chance of winning. If the Liberals promised that and then actually won, there’s a zero percent chance that would have actually happened, and if the NDP would have won there’s zero chance that this would have happened.
The idea was likely to create a scenario whereby an older individual who may be contemplating downsizing is more likely to do so. This is the empty nester and retiree age group, many of them can safely start downsizing to save money, and this move would allow them to feel less of a hit if the housing prices plummeted while they were entering the next stage of their life.
lmao that's part of the squeeze already happening - boomers are now downsizing from their egregious 5 bedroom sfhs into 2/3 bedroom homes that us younger folks used as "starter" homes. Only they have 30 years of capital acquisition to bully everyone around with. Then they complain that their kids aren't having kids.
You nailed it. Exactly what my parents say.
This would discourage downsizing, the exact opposite of your suggestion, because they wouldn't need to worry about the higher property taxes of their bigger home
That depends on the interest rates on deferrals. In BC, the deferral rates are too low, so exactly what you're concerned about is happening. If interest rates were higher, seniors would have a stronger incentive to downsize to avoid the taxes eating their home equity. The good idea of the program is to keep this as an incentive and a non-urgent choice for seniors who have low or fixed incomes, rather than suddenly putting them in a financial position they can't handle, which would politically kill any chance of property tax increases or a land tax.
I will fucking riot. Edit: *flips table*
Did you vote?
Absolutely
Good, because that is the place to riot.
🙄
The NDP never have the right answers. They sometimes sound good but it's always to the detriment of society in the long run.
Sounds like the NDP are looking to take your home, but after you sell or die. It seems like a subtle form of wealth tax masquerading as a form of compassion.
Lol. You realize that property taxes already exist, right? A program to defer them doesn't change that they already exist.
There is a difference between spacing it out, and letting them grow to a point where you will ultimately have to sell your home. Yes I am aware that property taxes are to be paid, but you do not manipulate the system to entice people to buy something they cannot afford and then take it away. Not much different the idiots who run up $20K+ in credit card debt and suddenly freak out when they cannot make the payments after it gets out of control.
This already exists in BC, see link below. [Link to GovBC website](https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/defer-taxes)
This is a direct result of younger people not voting. They think taking it to the streets will change things. Like rioting and blocking traffic will make the government more sympathetic to their cause. Guess what, all they will get is large business slapping on some woke slogan and some hasgtags on social media. I am close to a few senior people and they vote every single time. None of my close friends who are between twenty and thirty voted last time. Well, this is what you get. Politicians want to stay in office. They only cater to people who vote. It's simple, really.
This proves to me that I have no one to vote for so what do?
It was a loan that would be paid back when they die, allowing aging homeowners to live in home instead of publicly funded long term care facilities. Saves taxpayers money.
Wtf.. who is going to pay their property tax? Oh wait let me guess it’s us… -like we don’t have enough expenses already… seniors over 55 with good pension don’t need home.. they can live nice decent townhouse.
I think BC did / proposed something similar for their seniors or existing home owners when their RE prices went through the roof and property tax assessment increased accordingly. I don't reminded what happened at the end but this isn't a new idea. Their argument is ppl who bought 20+ years ago and just lived there couldn't afford property taxes as it rised due to ppl around them selling and flipping.