Trudeau planning to tax gains on personal residence?

Jdezmons wrote: ↑ I'm sorry, did you just try to argue that a $10 million increase in house price was due to inflation?

No I did not. Tax policy is set country wide, for decades at a time. That's what my comment referred to.

fogetmylogin wrote: ↑ Why do you need to be allowed to deduct expenses? You are confusing annual costs with capital gains.

I did not. To compute gains when you sell you deduct costs (you capitalise them). For example you deduct broker costs from your stock sales. Surely if you buy a house for $100,000, fix the foundation for $10,000, and sell at $110,000, you agree that you shouldn't be taxed?

desolatioN wrote: ↑ Soon they are going to be taxing the water and air we breath, and a walking tax the minute you leave your house.

People need to get upset about these ridiculous tax increases. We need less government, get rid off all the pigs and scale back the public sectors employees.

it's not ridiculous. It's all about fairness. I don't like paying taxes, but the Bon Jovi example illustrates my point exactly. Very wealthy people can use an expensive PR as a convenient way to park large amounts of capital and turn it into a tax-free capital gain over time. Oprah Winfrey has a house worth $100M+. Should she be able to pocket a $50M capital gain tax-free when she sells it in 10-20 years?

desolatioN wrote: ↑ Soon they are going to be taxing the water and air we breath, and a walking tax the minute you leave your house.

People need to get upset about these ridiculous tax increases. We need less government, get rid off all the pigs and scale back the public sectors employees.

pick your poison...

cerb cews = free money everyone survives = lots of taxes

pc gov't = no free money for everyone, 30% of workforce goes under , carnage economically, a few rich survive= lower taxes for the few that survive..everyone else falls way down the totem pole

lestat83 wrote: ↑ I agree with those who suggested there will be a grandfathered rule.

Overall, it's a good move, I'm not sure why principle residents receive special treatment. We live in a country that provides a high level of social safety net, high taxes come with that unforutnately.

We'd have to see the details to be able to judge how good a move it really is, but I see no legitimate reason for treating $1M+ capital gains on the sale of a PR as tax-free, when the average Joe is limited to $6K annual TFSA contributions.

taxrage wrote: ↑ it's not ridiculous. It's all about fairness. I don't like paying taxes, but the Bon Jovi example illustrates my point exactly. Very wealthy people can use an expensive PR as a convenient way to park large amounts of capital and turn it into a tax-free capital gain over time. Oprah Winfrey has a house worth $100M+. Should she be able to pocket a $50M capital gain tax-free when she sells it in 10-20 years?

Can’t believe what I’m reading. We are taxing people when they sell their homes AND when they buy new homes?(twice in Toronto).

This kind of lunacy would only be suggested in a country like Canada. This just pushes home prices even higher and that only benefits the rich. Someone take the wheel...Trudeau is driving us off a cliff.

fogetmylogin wrote: ↑ This seems unlikely. Any kind of tax reform is unpopular unless you do it like Trump and reduce revenues by a massive amount so almost everyone is better off. Even something revenue neutral like taxing gains on primary residence and reducing income taxes would cause a lot of anger. In the current environment where the government needs money any reform would probably need to increase revenue. Personally I think the first thing should be to restore the GST to 7%. I prefer this to income tax increases as I think it is more efficient and top rates are getting to the point already where they cause economic harm.

Could reducing government spending be an option?

A lot of European countries tax capital gains on all residences including primary ones under certain conditions.

In Germany for example, you will have to pay tax on the capital gains on your property if you sell within 10 years of purchase. If you have held the property for more than 10 years it is tax-free. This was done to reduce house flipping and speculation.

I would not be surprised to see something similar here and I think what Germany has done makes sense.

Jdezmons wrote: ↑ I'm sorry, did you just try to argue that a $10 million increase in house price was due to inflation? By extension, would you argue that the insane yoy gains in the GTA/GVA are by any stretch of the imagination proportional to the paltry rate of inflation we've experienced over the past decade?

I think the increases in the GTA/GVA are exactly inflation. Inflation often occurs when there is a decrease in the purchasing power of money. The purchasing power of our money has been diminished by an extended period of record low interest rates COMBINED with an eagerness by financial institutions willing to loan out massive amounts of funds to borrowers. The latter has effectively increased the money supply which also contributes to inflation. It has been reported by many people that the reported inflation numbers over the years are really meaningless and actually underreported because they fail to consider the true cost of living by ignoring the cost of housing in these figures. For most Canadians, the cost of housing has increased greatly beyond the inflation rate during the same period for which inflation is reported/calculated.

choclover wrote: ↑ Could reducing government spending be an option?

Well a lot of that is baked in now with borrowing until the end of the year. We can always cut spending the question is where and by how much. We spend somewhere around a quarter of our federal budget on individual transfers. Sure we can cut but you are basically taking from the poor some of whom will vote against it. Transfers to other governments mostly for healthcare is another quarter. Same story. A quarter is basically everything else the federal government does about a third of which is defence. We have promised to nearly double defence spending in the medium term and conservatives have said they will accelerate this. Just holding this steady looks difficult. Interest and other transfers makes up the rest. So of course there is lots of waste but where do we make real cuts that brings us to balance?

FrancisBacon wrote: ↑ I did not. To compute gains when you sell you deduct costs (you capitalise them). For example you deduct broker costs from your stock sales. Surely if you buy a house for $100,000, fix the foundation for $10,000, and sell at $110,000, you agree that you shouldn't be taxed?

Yeah repairs is a different argument. Property taxes and interest no.

JanZ95915 wrote: ↑ A lot of European countries tax capital gains on all residences including primary ones under certain conditions.

In Germany for example, you will have to pay tax on the capital gains on your property if you sell within 10 years of purchase. If you have held the property for more than 10 years it is tax-free. This was done to reduce house flipping and speculation.

I would not be surprised to see something similar here and I think what Germany has done makes sense.

It depends on the goal of the policy. To prevent speculation and house flipping some could get behind I.e. must hold property for X amount of time.

To do it to the steal the wealth of the the Canadian people/citizens to pay for their stupidity (deficit). They would immediately be voted out of office.

JayLove06 wrote: ↑ Can’t believe what I’m reading. We are taxing people when they sell their homes AND when they buy new homes?(twice in Toronto).

This kind of lunacy would only be suggested in a country like Canada. This just pushes home prices even higher and that only benefits the rich. Someone take the wheel...Trudeau is driving us off a cliff.

That's why there should be a threshold for the amount of capital gain, below which no tax would apply.

If there was a capital gains tax on a principal residence without a number of exemptions, the current real estate market would implode.

My house is worth about $850K - more than $450K more than it was worth when I bought it. If I had to pay like 25% tax on the gains, I'd basically never be able to move. Neither would just about anybody. That would destroy demand in the market.

Similarly, people wouldn't view real estate as a good investment for wealth growth.

fogetmylogin wrote: ↑ Yeah repairs is a different argument. Property taxes and interest no.

I don't see the difference. For investment properties, my understanding is that you can indeed capitalize property taxes and interest. If you will tax principal residences, then you consider residences and this should be deductible.

taxrage wrote: ↑ Very wealthy people can use an expensive PR as a convenient way to park large amounts of capital and turn it into a tax-free capital gain over time.

I don't think so. Rather, very rich people have very expensive houses (and clothes, and cars, etc.). Oprah is a billionaire. I doubt she bought her house thinking of the capital gain. She will probably never sell that house.

taxrage wrote: ↑ I see no legitimate reason for treating $1M+ capital gains on the sale of a PR as tax-free, when the average Joe is limited to $6K annual TFSA contributions.

The legitimate reason is a rule that applies to everyone. Rich people are supposed to have paid their fair share by paying 53%+ in income taxes. What they do with what is leftover should be treated equally to others.

Otherwise why stop at $1M? Why isn't the plumber paying more tax than the janitor on his house? And by the way, $6,000/year, $12,000/couple/year, definitely benefits the middle class a lot more than millionaires and billionaires. (proportionately)

FrancisBacon wrote: ↑ The legitimate reason is a rule that applies to everyone. Rich people are supposed to have paid their fair share by paying 53%+ in income taxes. What they do with what is leftover should be treated equally to others.

Otherwise why stop at $1M? Why isn't the plumber paying more tax than the janitor on his house? And by the way, $6,000/year, $12,000/couple/year, definitely benefits the middle class a lot more than millionaires and billionaires. (proportionately)

Exactly what rich person would structure their income as salary and be subject to a 53% marginal rate? Outside of his PM salary, do you think Trudeau pays 53%? Do you think Morneau pays 53%?

When John Roth cashed out $100M in NT stock options did he pay 53%? Well, at least he paid 25%. He has a multi-million dollar estate now and will make millions when he sells. THAT will be tax-free. Should it be? I don't think so.

There will be new taxes coming one way or the other.

I am thinking increasing estate taxes are coming sooner than later - easy target.

Countering with mortgage interest tax deductibility on principal residences, and a capital gains exemption on the first $250k if single or $500k if married, like the US.

Pretty bad if they decide to tax capital gains on principal residence.

RobertSmalls008 wrote: ↑ There will be new taxes coming one way or the other.

I am thinking increasing estate taxes are coming sooner than later - easy target.

They should raise the sales tax...at least that way everyone feels the pain.