While homeowners in Canada’s hottest local markets—Toronto and Vancouver—cash in on rapidly appreciating home values, all levels of government in the country are raking it in as well.

This is one takeaway from a new report care of National Bank, the country’s sixth largest bank, showing just how much of a “cash cow” the housing market is for municipalities, provinces, and the federal government.

“From a fiscal perspective, housing is something of a cash cow for Canadian governments,” write economists Warren Lovely and Marc Pinsonneault, the report’s authors.

More specifically, the three levels of government net a combined housing-related revenue nearing $120 billion annually, National Bank estimates. “If that sounds like a lot of dough, it is,” the economists comment.

In fact, that’s 6 per cent of Canada’s nominal GDP. Or, looked at another way, nearly one third (17 per cent) of consolidated government revenue, according to National Bank.

The money pours in from a variety of sources, with National Bank drawing attention to multiple levies, from provincial and federal sales taxes on housing-related purchases to municipal land transfer taxes.

National Bank also estimates a fifth of all government sales taxes are in some way connected to housing, whether it be from a new futon, wood flooring, or even simply electricity, for example.

And this year’s dizzying pace of existing-home sales in Ontario and BC has only added to the windfall. Looking at only land-transfer-tax revenue this year, the two provinces have taken in $1.1 billion more than they budgeted for.

“With so much at stake—economically and fiscally—policy makers would be wise to tread very carefully,” the report says. “This is one cash cow you don’t want to tip over.”

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