Governments bent on cooling home prices could get more than they bargain for
Do falling housing prices eventually impact local and provincial revenue?
While governments in Canada are focused on arresting the growth in housing prices to promote affordability, the unintended consequences of steeper-than-envisioned declines also merit consideration.
Municipal and provincial revenues are tied to property taxes, and as housing values decline, property-related tax revenues decline as well. The costs of delivering municipal services, however, continue to increase, often at a rate higher than the rate of inflation.