Ontario tried a speculation tax on property, and the market ‘collapsed overnight’ on April 9th, 197

Ontario tried a speculation tax on property,
and the market ‘collapsed overnight’ on April 9th, 1974

There are some dates you always remember, and for the Ontario real estate industry
it’s April 9, 1974. That is the day the province shocked the sector by announcing a
50% land speculation tax.

The governing Conservatives under Premier William Davis imposed a provincial tax,
fully independent of any federal capital gains tax, which allowed for a 50 per cent
tax on any land profits. Principal residences and family-owned farm lands were exempt.

Talk to those old enough to remember the Ontario tax and you get divided opinion
on whether going after speculators actually worked.

Toronto housing prices were rising fast by 1973. According to the Toronto Real Estate
Board, the average sale price of a home in 1972 was $32,513. A year later, prices
had climbed 25 per cent. Even after the speculation tax was brought in —
it received royal assent on June 3 — prices would still finish up 30 per cent for all of 1974.

Arthur Meen, Ontario’s minister of revenue at the time, had made it clear the tax
was aimed at speculators and people who added “no real value” to land other than to flip it.