Growing Concerns Over Potential Liberal Home Equity Tax

As Canada’s 2025 federal election campaign unfolds, the issue of a potential home equity tax has resurfaced, raising serious concerns among homeowners and voters.

Conservative leader Pierre Poilievre has warned Canadians that the Liberals, backed by the NDP, could be considering a home equity tax — a policy that would target the built-up value homeowners have in their properties. Poilievre has pledged not to impose such a tax if elected, framing the issue as a major threat to housing affordability and personal financial security.

The Liberal Party has officially denied these allegations, claiming they have no plans to introduce a home equity tax. However, past actions and associated studies raise questions about these denials.

In 2020, the Canada Mortgage and Housing Corporation (CMHC) — a federal agency — funded a $250,000 study by Generation Squeeze, led by University of British Columbia professor Paul Kershaw. This study explicitly explored ways to tax “housing wealth,” including home equity, under the premise that rising home values have created inequality. Despite initial denials, internal documents revealed that the study did include proposals related to taxing the equity of primary residences.

Although the government at the time distanced itself from the study, critics argue that the fact federal funds were used for such research raises doubts about the Liberals’ true intentions. It also demonstrates that the concept of taxing home equity has been seriously examined within government-funded initiatives, even if not yet formally proposed in legislation.

Further fueling concerns, in 2024, the Liberal government announced changes to the capital gains tax, raising the inclusion rate from 50% to 66.7% for gains above $250,000. Although the sale of primary residences remains exempt — for now — critics argue that these moves show a willingness to target wealth accumulation through property, creating fears that exemptions could be removed or altered in the future.

While the Liberals deny they have plans for a home equity tax, the historical record shows that discussions about taxing homeowners’ equity have been publicly funded, researched, and debated. Many voters are left questioning whether denials today could turn into policy proposals tomorrow.