Real Estate

And so it begins... Ontario finance minister wants higher capital gains taxes on house flippers

  • Last Updated:
  • Mar 21st, 2017 9:42 pm
Deal Addict
Feb 9, 2009
2495 posts
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Jungle wrote:
Mar 20th, 2017 9:11 pm
That's right. If the CRA finds you are flipping houses/condos and not living in them for a long period of time, 100% of the gain will be reported as income and taxed at your marginal tax rate. (ouch)
I'm curious of the CRA really cracks down on this.. yet.
I'm thinking many people havent been reporting these cap gains, especially those who sell on assignment.

Get rid of assignment selling. Register every buyer who buys property to find out who the buyer is to a central system that is kept track by the CRA. If the damn brokerage house can keep track of a few shares that I buy, how the hell can they not keep of people buying property worth hundreds of thousands or millions? only the gov't is this stupid.
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Mar 31, 2008
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Toronto
expatflame wrote:
Mar 20th, 2017 11:28 pm
Living in the house doesn't exempt the income from being treated as ordinary income for so called flippers. In general true flippers people who might do a couple of units per year or more will have gains included as income not capital gain.
What about a long-term investment property?
Jr. Member
Apr 27, 2014
147 posts
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Mississauga, ON
at1212b wrote:
Mar 21st, 2017 12:03 am
What about a long-term investment property?
Assuming you already own it your ACB will be bumped up to FMV at date of change and any gain beyond that would be subject to the higher inclusion rate.
Deal Addict
Aug 30, 2011
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Ottawa
Sanyo wrote:
Mar 20th, 2017 11:35 pm
I'm thinking many people havent been reporting these cap gains, especially those who sell on assignment.

Get rid of assignment selling. Register every buyer who buys property to find out who the buyer is to a central system that is kept track by the CRA. If the damn brokerage house can keep track of a few shares that I buy, how the hell can they not keep of people buying property worth hundreds of thousands or millions? only the gov't is this stupid.
You do realize that taxfiers must show property sales on their tax returns now, whether principal residence or not. Before you call the government stupid, you should know your facts.

By doing this, the CRA is tracking all sales, and can see if someone has several sales in a year, and can identify flippers. I'm sure they can cross-reference to other sources in case someone "forgets" to report a sold property.
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Feb 9, 2009
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OttawaGardener wrote:
Mar 21st, 2017 7:20 am
You do realize that taxfiers must show property sales on their tax returns now, whether principal residence or not. Before you call the government stupid, you should know your facts.

By doing this, the CRA is tracking all sales, and can see if someone has several sales in a year, and can identify flippers. I'm sure they can cross-reference to other sources in case someone "forgets" to report a sold property.
They just started now ... why wasn't this in effect for all these decades before? And how would the cra stop foreign cash buyers? They can't ... this is why cap gains need to be deducted at source for these people and I guarantee that isn't happening.
Jr. Member
Dec 5, 2015
148 posts
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Thornhill, ON
Sanyo wrote:
Mar 21st, 2017 7:28 am
They just started now ... why wasn't this in effect for all these decades before? And how would the cra stop foreign cash buyers? They can't ... this is why cap gains need to be deducted at source for these people and I guarantee that isn't happening.
Because the Liberals just got in power .. Previous govt was all about oil and flipped houses
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Apr 21, 2004
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expatflame wrote:
Mar 20th, 2017 5:50 pm
FYI he wants higher capital gains inclusion rate for non principal residences. If you are flipping houses as a job the income is not capital gains.
How to tell if it's flipping (income) or investment (capital gains) purpose?

I think that hearsay about capital gains increase may be limited to R/E and not stocks/bonds/etc. Those things cannot be cooled off by taxes but R/E can.
Jr. Member
Apr 27, 2014
147 posts
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Mississauga, ON
alanbrenton wrote:
Mar 21st, 2017 9:22 am
How to tell if it's flipping (income) or investment (capital gains) purpose?

I think that hearsay about capital gains increase may be limited to R/E and not stocks/bonds/etc. Those things cannot be cooled off by taxes but R/E can.
Depends on the facts and circumstances in each case. Could be a sale that the taxpayer lived in for over a year but in the last 5 years they have bought and sold say 5+ properties than this will be deemed income. No hard and fast rule here but in general if you flip a couple within a few years it will likely be treated as income.
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Feb 9, 2009
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Doubleshot wrote:
Mar 21st, 2017 7:31 am
Because the Liberals just got in power .. Previous govt was all about oil and flipped houses
Libs been in power as much as the cons over the last few decades.
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May 31, 2007
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expatflame wrote:
Mar 21st, 2017 10:01 am
Depends on the facts and circumstances in each case. Could be a sale that the taxpayer lived in for over a year but in the last 5 years they have bought and sold say 5+ properties than this will be deemed income. No hard and fast rule here but in general if you flip a couple within a few years it will likely be treated as income.
In addition they can also apply the crazy multiple assignment contracts, which seems flip property back and forth between sellers/ buyers.
I suspect a lot of agents are going to get burned on this one if it comes true.
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