Image Credit: CFJC Today

By Noah Rishaug

HOUSING AFFORDABILITY

Kamloops-launched petition calling on Ottawa to reduce taxes for land trusts to reach parliament

Jan 24, 2023 | 4:30 PM

KAMLOOPS — The Kamloops and District Chamber of Commerce says it has a potential solution to the housing crisis but needs federal government support, and it has gathered enough signatures to take it to parliament.

A community land trust is a not-for-profit that uses donated land to build affordable housing. The chamber believes that legislating tax cuts for land donations will make it easier to create a land trust and may help relieve the housing crisis. Community land trusts can be used to create many different developments, from housing cooperatives to apartments.

“By taking the land out of the equation, it’s instantly more affordable,” explained Kamloops Region Chamber of Commerce Colin O’Leary. “A house that would sell for $600,000 — if you instantly take out $200,000 for the land, that same house is now $400,000.”

The existing model for donating land to a community land trust is tax-heavy. Individuals who donate will have to pay capital gains tax on the increase in property value from the initial purchase. The petition aims to both eliminate the capital gains tax on donations and provide tax incentives for people and corporations to donate their land.

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“What’s going to happen is, if somebody has a piece of land, let’s say it’s their parents property and they passed away,” continued O’Leary. “Now it’s an estate, and they don’t want to move into that and they’re looking at what they can do with it. If they wanted to donate that right now for affordable housing they would actually get hit with capital gains tax. Let’s say their grandparents bought it for $100,000 and now it’s worth $600,000. About half of that $500,000 (difference) is going to be lost to capital gains. But with this policy, what’ll happen is, they can donate that land, they don’t have to pay the capital gains tax. Then they actually get a tax credit for the total value of that home back.”

The chamber has gathered a petition to support the idea, which reached the required 500 signatures. The MP for Kamloops-Thompson-Cariboo, Frank Caputo, has backed the motion and will introduce the petition to the House of Commons.

“A petition is really one of two things that a member of parliament can do to signal their intention to parliament to change things — as in sponsoring a petition,” Caputo told CFJC Today. “One is just that, the petition, the other is through a private members bill. You may well see something from me on this point.”

Caputo adds he expects to introduce the petition within a few weeks, when parliament resumes on January 30.