The Coalition Against New Home Taxes (CANT) has launched a campaign, featuring the unwinnable home ownership game Taxopoly, to alert the public housing affordability woes wouldn’t be so dire if taxes weren’t so excessive.

CANT counts 30 developers among its membership, and this is its second public outreach campaign. Shortly after it was founded in August, the group focused its initial efforts on politicians, arguing tax regimes hamper new construction at a time when Canada’s population is surging.

Matt Young, president and CEO of Republic Developments, and CANT’s chair, told RENX galvanizing a largely oblivious public over the relationship between unaffordability and construction taxes may prove the most effective way to slashing the latter.

“The only way to make housing more affordable is to remove input costs,” Young said, adding CANT’s focusing on development charges, HST, and — in Toronto’s case — the double land transfer tax.

“That would bring the pricing of homes down.”

Other members of the group include Alterra, DBS Developments, LAMB Development Corp. and many more

Dramatic rise in new home taxation, fees

Young noted taxes comprised around 12 per cent of a GTA home’s price 15 years ago, and around 30 per cent today while property values have also tripled.

Prices across Canada have increased so much during the past decade they’ve become completely untethered from traditional market fundamentals, namely family incomes.

Toronto is North America’s fastest-growing city, but home prices softened in recent years and exposed a fragile housing ecosystem.

Young — who noted the campaign will also include a large sign, or hoarding, on downtown Toronto buildings and properties — said that should send a clear message to elected officials.

“The market’s not going to work without you making a change, so you can either take the whole industry down with you, and take homeowners down with you, making sure that young Canadians and new Canadians never have a chance to own a home,” he said. “Or you can do the right thing and lower taxes, get shovels in the ground, get housing starts going again and renew our economy.”

Taxopoly - the game you can't win

In order to bring additional attention to the issue, CANT created Taxopoly, a board game spoofing Monopoly that it sent to a selection of politicians. But there’s a catch.

The game features “Not a Chance Cards,” and “Go to Your Parents Housing,” instead of Monopoly’s “Go to Jail.”

Taxopoly is designed to be unwinnable and illustrate the sense of hopelessness being felt by many potential homebuyers. 

“Homeownership in Canada is an unwinnable game right now, it’s almost impossible,” Young said.

The board game also has a call-to-action to put politicians on notice. 

Although CANT’s 30 industry members are mostly located in the Greater Toronto Area, Taxopoly is a nationwide initiative.

Dollar for dollar price reductions

To create concrete benefits for potential homebuyers, members of the coalition pledge to match every dollar of tax eliminated with similar reductions to the prices of their new homes.

“We’re signing a pledge that for every dollar of tax cut by any level of government, we’ll drop our home prices, dollar for dollar, with those tax cuts,” Young said.

“Our goal is to ensure homebuyers can afford the homes we’re selling, and to make sure we push shovels in the ground and keep building the supply that our country needs.”

While the pledge is an eye-catching initiative, Scott McLellan, the COO of Toronto-based developer and property owner PlazaCorp., said it's only one part of the pricing pressure built into building pro formas today - the situation is more complicated than just taxation woes.

“If there are 30 per cent taxes, that means on a $1,000 a square foot, you’re going to sell it for $700 a square foot,” he said. “You can’t even build like that because construction costs, for example, are $550 a square foot and land is still $100 a square foot. There are other soft costs associated with it.”

PlazaCorp. is not a member of CANT, though McLellan said the initiative is worthwhile because it will help raise public awareness.

High taxes, fees a nationwide housing issue

The problem is not confined to the Toronto area; taxing development to the hilt is becoming deleterious to Canada’s economy, according to Harp Khela, president of Khela Real Estate Group in the Metro Vancouver city of Surrey. The high cost of building in British Columbia, and especially the Vancouver area, has left it at a disadvantage when competing with other jurisdictions for new businesses.

“If we’re in an area where development is taking longer and it’s too expensive, then end users are going to start looking at other provinces, or even moving to the U.S. rather than being in B.C.,” he said. “They want to be here, or should be here, and we’re pricing them out of the market.”

He added that, after the bevy of fees, developers underwriting new development sites are struggling to achieve worthwhile profitability, which in turn diminishes land values.

“We end up with transactions not occurring at all because of fees that are drastically increasing,” Khela said. 

Young said nothing is likely to change unless the public engages the issue. He believes the CANT campaign — whether through Taxopoly, social media awareness or the interactive hoarding installation at the intersection of Bathurst and Richmond in downtown Toronto — has a simple enough message to do that.

“We tax homes the way we tax cigarettes and alcohol,” he said. “Governments should be incentivizing the building of housing, not trying to tax the building of housing.

"We should not be taxing shelter the way that we do, and I think everybody can understand that issue.”