Winnipeg is considering imposing a $10,000-$12,000 tax on new home buyers.
Details on the proposed development charge will be explained to Winnipeg city councillors during a seminar this afternoon.
However, Coun. Scott Fielding said one of the reasons he quit the executive policy committee at the end of October is because he couldn’t support the 2014 budget the group was preparing to bring to council.
"They’re calling it a growth-based tax but plain and simple it’s a tax on new home purchases," Fielding (St. James-Brooklands) said. "That’s going to make housing a little less affordable here in the city."
Fielding said the new tax is expected to raise $30 million every year, adding it will be levied on new building lots, and all commercial and industrial developments, and it’s being presented as a way to pay for infrastructure associated with developments.
"That was the plan when I was on executive policy committee," Fielding said this morning. "It could have changed in the past week."
Fielding said developers already pay for infrastructure for new developments, adding this tax would be a double-hit which would be passed onto homebuyers.
Developers are charged a variety of fees for infrastructure-related expenses, including:
- 100 per cent of costs for constructing residential and collector street, intersection improvements, sewer and water, storm retention, sidewalks;
- 50 per cent for the cost of nearby regional streets as a result of the development.
However, a group of councillors believe that existing home owners are subsidizing suburban growth, which is driving tax increases and a reduction of services in older neighbourhoods.
Council became embroiled in an hour-long debate two weeks ago over a plan for a new development in south Charleswood known as Ridgewood South.
Fielding said he believes there is support on council for the new tax.
Fielding said he’s concerned the new tax at that amount could force some Winnipeggers to move out of the city and into one of the bedroom ring communities.
"If someone is looking at a new home in Waverley West or LaSalle, it could be cheaper to build in LaSalle."
Fielding said such a new charge would require provincial approval and amendments to the Winnipeg Charter.