.
.
Tax Policy Comparison:
PERSONAL TAXATION #8
| Tax Policy Comparison: PERSONAL TAXATION #8 |
Conservative Party | Liberal Party |
|---|---|---|
| POLICY | N/A | Re-introduction of the Old “Multi-Unit Residential Building” (“MURB”) Tax Shelters? |
| DATE | N/A | 31-Mar-25 |
| URL | No Policy to View | View Policy |
| DESCRIPTION & COMMENT | N/A | The Liberals announced more spending. This time they are proposing to spend $25 billion to create a new housing fund. And provide $10 billion in incentivized financing to home builders. How this is supposed to significantly increase housing starts is a mystery. One can legitimately debate whether or not the government should be in the business of housing which clearly this announcement suggests that a Liberal government wants to be in that business.
Notwithstanding, buried in the spending release, was the following line: Make the housing market work better by catalyzing private capital, cutting red tape, and lowering the cost of homebuilding [by]…… reintroducing a tax incentive which, when originally introduced in the 1970s, spurred tens of thousands of rental housing across the country. The reference to the 1970s tax incentive is no doubt a reference to the old Multiple Unit Residential Building (“MURB”) tax shelter provisions. The provisions were introduced in 1973. They were implemented as tax incentives to stimulate investment in multiple-unit rental properties. The goal was to encourage the construction and maintenance of rental housing by providing favorable tax treatment to investors for investments in these types of properties. The MURB program ended in 1987. Was the MURB Program Successful? From history, the MURB program was successful in attracting investment into the rental housing market. By offering tax incentives, it encouraged investors to put their money into multiple-unit residential buildings, which helped increase the supply of rental housing during the program's active years. However, There were Multiple Criticisms of the MURB Program Including: 1. Tax Shelter Concerns: the program was often used as a tax shelter. Investors were able to use the CCA to create or increase rental losses, which could then be used to offset other taxable income. This led to concerns that the program was being exploited for tax avoidance rather than genuinely stimulating long-term investment in rental housing. 2. Short-Term Focus: Critics argued that the program encouraged short-term investment rather than long-term commitment to rental housing. Investors were often more interested in the immediate tax benefits rather than the long-term viability and maintenance of the rental properties. 3. Market Distortions: The program was also criticized for creating market distortions. By providing significant tax advantages, it may have led to an oversupply of rental units in certain areas, which could have depressed rental prices and affected the overall housing market dynamics. |
Tax Policy Comparison:
PERSONAL TAXATION #8
Tax Policy Comparison: Personal Taxation #8
Conservative Party
Liberal Party
Date: March 31, 2025
Summary:
Re-introduction of the Old “Multi-Unit Residential Building” (“MURB”) Tax Shelters?
Description & Comment:
The Liberals announced more spending. This time they are proposing to spend $25 billion to create a new housing fund. And provide $10 billion in incentivized financing to home builders. How this is supposed to significantly increase housing starts is a mystery. One can legitimately debate whether or not the government should be in the business of housing which clearly this announcement suggests that a Liberal government wants to be in that business.
Notwithstanding, buried in the spending release, was the following line:
Make the housing market work better by catalyzing private capital, cutting red tape, and lowering the cost of homebuilding [by]…… reintroducing a tax incentive which, when originally introduced in the 1970s, spurred tens of thousands of rental housing across the country.
The reference to the 1970s tax incentive is no doubt a reference to the old Multiple Unit Residential Building (“MURB”) tax shelter provisions. The provisions were introduced in 1973. They were implemented as tax incentives to stimulate investment in multiple-unit rental properties. The goal was to encourage the construction and maintenance of rental housing by providing favorable tax treatment to investors for investments in these types of properties.
The MURB program ended in 1987.
Was the MURB Program Successful?
From history, the MURB program was successful in attracting investment into the rental housing market. By offering tax incentives, it encouraged investors to put their money into multiple-unit residential buildings, which helped increase the supply of rental housing during the program's active years.
However, There were Multiple Criticisms of the MURB Program Including:
1. Tax Shelter Concerns: the program was often used as a tax shelter. Investors were able to use the CCA to create or increase rental losses, which could then be used to offset other taxable income. This led to concerns that the program was being exploited for tax avoidance rather than genuinely stimulating long-term investment in rental housing.
2. Short-Term Focus: Critics argued that the program encouraged short-term investment rather than long-term commitment to rental housing. Investors were often more interested in the immediate tax benefits rather than the long-term viability and maintenance of the rental properties.
3. Market Distortions: The program was also criticized for creating market distortions. By providing significant tax advantages, it may have led to an oversupply of rental units in certain areas, which could have depressed rental prices and affected the overall housing market dynamics.
View Policy
Summary:
Re-introduction of the Old “Multi-Unit Residential Building” (“MURB”) Tax Shelters?
Description & Comment:
The Liberals announced more spending. This time they are proposing to spend $25 billion to create a new housing fund. And provide $10 billion in incentivized financing to home builders. How this is supposed to significantly increase housing starts is a mystery. One can legitimately debate whether or not the government should be in the business of housing which clearly this announcement suggests that a Liberal government wants to be in that business.
Notwithstanding, buried in the spending release, was the following line:
Make the housing market work better by catalyzing private capital, cutting red tape, and lowering the cost of homebuilding [by]…… reintroducing a tax incentive which, when originally introduced in the 1970s, spurred tens of thousands of rental housing across the country.
The reference to the 1970s tax incentive is no doubt a reference to the old Multiple Unit Residential Building (“MURB”) tax shelter provisions. The provisions were introduced in 1973. They were implemented as tax incentives to stimulate investment in multiple-unit rental properties. The goal was to encourage the construction and maintenance of rental housing by providing favorable tax treatment to investors for investments in these types of properties.
The MURB program ended in 1987.
Was the MURB Program Successful?
From history, the MURB program was successful in attracting investment into the rental housing market. By offering tax incentives, it encouraged investors to put their money into multiple-unit residential buildings, which helped increase the supply of rental housing during the program's active years.
However, There were Multiple Criticisms of the MURB Program Including:
1. Tax Shelter Concerns: the program was often used as a tax shelter. Investors were able to use the CCA to create or increase rental losses, which could then be used to offset other taxable income. This led to concerns that the program was being exploited for tax avoidance rather than genuinely stimulating long-term investment in rental housing.
2. Short-Term Focus: Critics argued that the program encouraged short-term investment rather than long-term commitment to rental housing. Investors were often more interested in the immediate tax benefits rather than the long-term viability and maintenance of the rental properties.
3. Market Distortions: The program was also criticized for creating market distortions. By providing significant tax advantages, it may have led to an oversupply of rental units in certain areas, which could have depressed rental prices and affected the overall housing market dynamics.
View Policy
Liberal Party