Comment 28490

By A Smith (anonymous) | Posted February 06, 2009 at 18:39:22

Jon C, >> ? Rates appear to be low enough now that companies can hold large swaths of down town vacant for decades.

First of all, vacant properties are a symptom of the lack of demand for people wanting to live in Hamilton. Secondly, if property owners stopped believing that taxpayers were going to give them sweetheart deals, perhaps they wouldn't buy them in the first place, in which case they would be vacant for other reasons. However, judging by the fiasco that is/was the Lister block, the city is teaching others to do the very same thing, namely hold out long enough and you too will get a great deal at the taxpayers expense.

A better solution is to reduce tax rates across the board. For example, if you own a home $300,000 home in Hamilton, you pay the city almost $5000 in taxes per year. If you own a $300,000 home in Toronto, you only pay $2559 in taxes. Therefore, if you are interested in keeping as much of your income as possible (which most people are), why would you choose a city that takes almost twice as much in taxes? You wouldn't.

If Hamilton reduced its dead weight cost of owning property in Hamilton to Toronto levels, you would increase demand for properties, because you would be increasing the amount of income investors/individuals could keep. However, instead of relying on political games like the Lister block, lower tax rates would serve as an across the board subsidy/incentive for everybody. Over time, this would have the effect of making Hamilton a great place to locate and would increase the demand for residences as a result.

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