Comment 34142

By A Smith (anonymous) | Posted September 26, 2009 at 01:29:28

Jason, property taxes are a tax on investment. Whereas Toronto charges a low tax rate on investment, Hamilton charges a high one.
Because people like to make money on their investments, which city do you think will attract more investment, the one that takes a large percentage of the owner's equity, or the one that takes a small percentage of the owner's equity?

Think of it this way, you have the choice between two bond funds. Both of these return 2.5%/year, but one charges a management fee of 0.85%, the other charges 1.59%. Which fund will get more investment dollars?

This isn't rocket science, it's basic math. Banks understand this and that's why they look at Hamilton as being a bad place to invest. If Hamilton stops punishing wealth accumulation with high tax rates, banks will definitely take a second look and so will people looking to invest hundreds of thousands of dollars into a new home/condo.

The bottom line is this, if you want more of something, you tax it less, if you want less of something, you tax it more.

Therefore, as long as Hamilton continues to tax property investments at a high rate, we will get very little of it. That's just reality.

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