Edmonton councilor wants mansion tax, city studies progressive taxation

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An Edmonton councilor wants to see mansion owners pay higher property taxes, arguing those with more wealth should pay more as the city plans for a tough fiscal year.

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Coun. Michael Janz wants to see multimillion-dollar property owners paying even higher rates of taxes. On Monday, city council asked staff to investigate what it would mean to charge different tax rates for residential properties in different categories, such as those of higher values. A report on options is due at the end of September.

The current property tax system already charges higher amounts based on property values. Even so, Janz said with taxpayers potentially facing a steep tax hike next year and how the pandemic has increased inequality, people who have more wealth should pay more.

“It’s a question of fairness, and it’s a question of adequately resourcing the needs that will help everyone,” he said in a recent interview. “We can’t keep, as a city, saying we don’t have enough when we aren’t truly looking at having we exhausted every opportunity at our disposal.”

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At the Monday meeting, Janz told councilors that having a progressive tax rate is based on the idea that taxes for a $300,000 home and $3-million home shouldn’t be evaluated in the same way.

“That’s outdated and I think that’s wrong,” he said Monday. “What I’m looking for here is an ability to help better reflect the challenges that we (have) around equity in our community.”

Janz noted income tax is progressive in Canada, and some provinces have progressive taxation.

“Those who have a little bit more, and built this wealth through property, which is one of the most reliable and safe ways to have wealth, should be able to pay a little bit more,” he said.

Janz’s initial motion, which was changed for Monday’s meeting, asked for information on tax subclasses for residential homes valued in the top one per cent, at $1 million, $2 million or $3 million, and that extra revenue could be used for community safety and well -being and eliminating poverty.

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Instead, council passed a motion 11-2 requesting a report “that discusses how the property tax system might be changed to create a more progressive taxation system,” due to executive committee Sept. 28. Councilors Karen Principe and Jennifer Rice opposed.

Ahead of the vote, Council. Jo-Anne Wright worried if some, including seniors, could be negatively impacted by such a change.

“My concern would be for those whose property values ​​have appreciated just because of time, and maybe those are some of the seniors that can’t necessarily afford the higher property tax,” she said. “But I’m interested to see if there’s something we can do differently, so I appreciate the motion.”

Asked how the current system would differ, Anton Szabo, a director of the city’s taxation branch, said in the current system, people pay an amount proportional to the value of their home.

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For example, someone who owns a $400,000 home pays half of what someone owns a $800,000 home pays.

Property tax, Szabo said, is an attempt to find “fairness and equity in the distribution of tax levy” based on property value. While the current system and a progressive taxation system would both be based on wealth and not income, they are different.

“Progressive (tax) would suggest that the more value you own, you actually pay more relative to others,” he said.

“It could be based on the value of property, it could be based off the quality of property, size of property — you can do a variety of different kinds of ways,” he said. “I think the focus is what are other ways we can get around to the ability to pay beyond the baseline market value assessment approach.”

The city has also looked into residential subclasses for derelict properties or basing tax on density.

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