They’re persistent, you gotta give them that. Certain members of council, along with Mayor Dave Bronconnier, have again regurgitated the idea of slapping a one-per-cent tax on the sale of new homes — and to go along with that, a second part of the idea is slapping the land development industry with another levy on new and redeveloped property.

Calgary Herald ArchiveCity council is considering a one per cent tax on the sale of new homes.

A city committee, though, has asked for more study of the available options. Word is the issue will be discussed and batted around until sometime this fall.

But about the one-per-cent solution (and it could be higher than that).

It was galling when it was suggested last summer, but it’s even more galling now given that house prices have declined, council has already approved tax hikes — and when some semblance of housing affordability has wiggled its way back into the marketplace after being absent for a few years.

We’re at a point where first-time buyers can now afford to buy their own places.

Then the gang at city hall drags this plan off the shelf, puts the Swiffer to it and drops it on the table for consideration.

But those behind this scheme, and it is a scheme, were at least smart enough to try to get it passed by putting a different spin on the whole thing.

Not wanting it to look like a flatout tax grab, the gang flowered it up by saying it is a stable source of revenue to deal with the affordable housing crunch.

Yeah, right, a rose by another name ... I support the need for affordable housing, but when the city’s economy isn’t as strong as it was a year ago, when consumer confidence is already negatively affecting activity in both the new and resale housing market, and when council’s reputation with the public is already in the tank, this is not the time for another cash grab.

A city report suggests something like 18 per cent of Calgary households are in need of affordable housing because their income is below $44,000, and nine per cent are in critical need.

Help is needed, no doubt. But why from the city taxpayer?

If the municipal government needs some extra money for affordable housing, there is federal infrastructure money — I think that’s what the fund is for.

Last July, council approved an intergovernmental affairs report, a move that would have brought about a request from the city to the provincial Stelmach government for changes to the Municipal Government Act.

The request would have allowed additional income sources for the city, including the land transfer tax. What council was looking for then was the province’s blessing to put the tax in place.
The city would then have the power to impose and collect the tax — and homeowners would again be dressed up like cash cows and told they have to shoulder more of a financial burden.

But what it’s doing is making existing housing less affordable, which is a bad thing.

The Calgary Real Estate Board says the average selling price at the end of January was just over $413,000 for detached resale homes inside Calgary’s city limits, so the tax would be $4,100 right off the top, increasing the cost of selling a home.

For condos, the tax would amount to about $2,700, based on January numbers from the board.

An aside here. A few years ago, a national study found that more than 16 per cent of the cost of homes was due to various taxes, fees, levies and charges dumped on buyers by the various levels of government.

I’m sure that figure has grown since.

There was one other suggestion that was aired, and this one makes a whole lot more sense. It was a suggestion that a portion of new developments be dedicated to affordable housing.

One last look back at the 2008 resale market, this time at the national level.

Some 434,477 homes traded hands via the MLS systems of real estate boards in Canada in 2008, down 17.1 per cent from the record 523,855 properties sold in 2007.

“There is a difference between a dead market and a quiet market, and residential real estate markets in Canada are anything but dead,” says Calvin Lindberg, president of the Canadian Real Estate Association. “These results represent the sixth highest annual sales totals for MLS residential properties on record, just half a per cent below 2003 levels.”

Seasonally adjusted sales activity declined in every quarter last year, marked by a sharp drop in the fourth quarter.

Sinking activity in the fourth quarter accounted for over half of the decline in transactions since the peak in 2007.

Lower activity in Canada’s priciest housing markets, particularly B.C. and Alberta, “weighed heavily” on the national average price in 2008, says Lindberg.

This caused the national average price to edge lower, despite reaching record highs in every province except Alberta — and I do mean edge.


It was down just seven-tenths of one per cent in 2008, to $303,594.