# Rumours of capital gains tax coming to primary residence



## Fisherman30 (Dec 5, 2018)

So for some reason, I keep reading about the possibility of this. Anyone think this is an actual possibility? What a nightmare that would be.


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## rl1983 (Jun 17, 2015)

It would be the end of Trudope's reign on Canada that's for sure. It's unforgivable.


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## Money172375 (Jun 29, 2018)

Fisherman30 said:


> So for some reason, I keep reading about the possibility of this. Anyone think this is an actual possibility? What a nightmare that would be.


I think it might happen but the proposal I saw was targeting speculators. there was very little or no tax if you own the home for 5 years or more, and only amounts above a threshold are taxed. Was it $500k? I’ll see if I can find the details I saw.


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## bgc_fan (Apr 5, 2009)

Fisherman30 said:


> So for some reason, I keep reading about the possibility of this. Anyone think this is an actual possibility? What a nightmare that would be.


You talking about a proposal to look at the possibility that was floated last year? Or something more recent. Capital Gains Tax On Primary Residence Is Coming | Toronto Realty Blog!

Keep in mind, the idea was to discourage house flippers with the idea that those who live in a house for more than 5 years would pay 0 capital gains. Doubt it would happen, but an interesting way to deal with speculators and home flippers to stabilize house prices.


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## Money172375 (Jun 29, 2018)

We’re gonna have to pay for the pandemic somehow. What ideas do you think are reasonable?


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## rl1983 (Jun 17, 2015)

Money172375 said:


> We’re gonna have to pay for the pandemic somehow. What ideas do you think are reasonable?


All in time. Nothing says it has to be paid back tomorrow.


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## MrMatt (Dec 21, 2011)

Money172375 said:


> We’re gonna have to pay for the pandemic somehow. What ideas do you think are reasonable?


Stop wasting money.
Don't make big expensive programs that are only of limited benefit to special interest groups.

Oh, and honestly, fix the welfare traps we have, and raise the personal basic deduction to a living wage.
this will require provincial help, but it should NEVER be the case that you're better on social assistance than if you get a job.


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## Tostig (Nov 18, 2020)

I remember the prediction by the Real Estate lobby in Ontario in 2007 that the new Toronto levy on land transfer was going to kill the real estate market.

I remember further back in 1986 during one of my early jobs, when PH&N was setting up our group RRSP, the salesperson said if the Liberals get into power, our RRSP was going to be locked-in.

Seems to me that the rumour is how fake news begins and that someone has a political motive to frighten people.


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## sags (May 15, 2010)

The only ones raising the issue that I have seen are Conservative politicians.

It is like they are promoting the idea. If there are any tax increases, I think they will be focused on tax avoiders and evaders.

Otherwise........many people who aren't conservative don't think there is a debt problem at all.


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## Eder (Feb 16, 2011)

Without a doubt taxes are going up. Capital gains on residences is low hanging fruit .


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## OptsyEagle (Nov 29, 2009)

I was hoping the bill to pay the piper was not going to come about until at least the next budget after my death but I do worry that the pandemic spending moved it all forward to sooner date. Hopefully some significant country, with worse finances then ours, goes off the rails quickly so as to give our current government the shot across the bow they so desperately need. 

It appears to me that the taxpayer also needs that shot across the bow for it to work properly.


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## Tostig (Nov 18, 2020)

sags said:


> The only ones raising the issue that I have seen are Conservative politicians.
> 
> It is like they are promoting the idea. If there are any tax increases, I think they will be focused on tax avoiders and evaders.
> 
> Otherwise........many people who aren't conservative don't think there is a debt problem at all.


I have no doubt that when the pandemic is over, provincial conservative governments across the country will be cutting budgets to address their deficits. And guess where the biggest cuts will come from? Health and education. Yup, give our doctors, nurses and front line workers all the praise we can give them in our time of need but when times are good, those same people that saved our lives at the expense of theirs is just a big financial burden.

There are reports that enrollment into nursing programs are up. Students see that health care is recession proof but little do they know, healthcare under conservative governments aren't austerity-proof.


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## MrMatt (Dec 21, 2011)

Tostig said:


> I have no doubt that when the pandemic is over, provincial conservative governments across the country will be cutting budgets to address their deficits. And guess where the biggest cuts will come from? Health and education. Yup, give our doctors, nurses and front line workers all the praise we can give them in our time of need but when times are good, those same people that saved our lives at the expense of theirs is just a big financial burden.
> 
> There are reports that enrollment into nursing programs are up. Students see that health care is recession proof but little do they know, healthcare under conservative governments aren't austerity-proof.


Health and education are by far the largest chunk of the provincial budget.
Obviously if they have to pare back, the largest dollar savings will come from those areas.

Also, since the Premiers aren't Liberals, the easiest way to get out is for the feds to simply slash transfers to the province, then blame the Premiers for the actual cuts.
Worked for Chretien, I bet Trudeau could do the same thing.
Heck he might even slash health transfers, then create a pharmacare program and claim he's doing the work the provinces won't.

Realistically I don't imagine Trudeau will actually cut anything, I don't think he knows why you'd want to.


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## Retiredguy (Jul 24, 2013)

Why not think outside box and give a one time reduction of CG tax to say 40% from the current 50 for tax year 2021 only. I'd expect a lot of people to crystalize gains rather than waiting for death. Even those whose spouse would survive them.


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## nathan79 (Feb 21, 2011)

I think it would be a good idea as a tool to hopefully moderate house prices. Maybe existing owners could get some kind of an exemption, or the tax could be applied on a forward basis. I would have no problem paying tax on any gains whether I sold in 2 years or 20 years down the road. The idea of buying a primary residence with the expectation of making money on it is one of the more unfortunate mindsets to emerge in recent years.

There's a lot more that could be done to discourage this sort of behavior, but it would be a decent start. Unfortunately, I rate the chances of this (or much else) happening as "low". Homeowners are too big of a voting block, and few want to see their home drop even 1% in value, even if it already went up 20% in a single year.


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## MrMatt (Dec 21, 2011)

Retiredguy said:


> Why not think outside box and give a one time reduction of CG tax to say 40% from the current 50 for tax year 2021 only. I'd expect a lot of people to crystalize gains rather than waiting for death. Even those whose spouse would survive them.


"One time" or "temporary" policies make a mess of things.

They should try to be consistent and predictable.


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## Ukrainiandude (Aug 25, 2020)

You bought (bank bought for most Canadians) a house for 100,000 lived in it for 30 years, payed it off, put some money into maintenance and taxes. Now time to sell, and it’s worth $500,000
I see no reason why, $400,000 (maybe minus taxes and maintenance costs (if you kept receipts)) should not be taxed?
unpopular ? Yes.
unreasonable? No.


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## like_to_retire (Oct 9, 2016)

Ukrainiandude said:


> You bought (bank bought for most Canadians) a house for 100,000 lived in it for 30 years, payed it off, put some money into maintenance and taxes. Now time to sell, and it’s worth $500,000
> I see no reason why, $400,000 (maybe minus taxes and maintenance costs (if you kept receipts)) should not be taxed?
> unpopular ? Yes.
> unreasonable? No.


Actually, over those 30 years, considering all expenses and the increased risk over renting, that house probably hasn't been a great investment, but the left loves to spend other people's money and tax anything that moves. So sure, lets tax home ownership.

ltr


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## Just a Guy (Mar 27, 2012)

It also tends to be the only major saving most people have. How do they pay for the failing health and care that they’ll need in the later years? More government handouts?


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## sags (May 15, 2010)

Unfortunately people can live in million dollar homes and collect government welfare for retirees.


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## sags (May 15, 2010)

It might be a good time to revamp the entire tax code, eliminate a plethora of tax loopholes, and institute a flat tax on all income streams....so everyone contributes their fair share.


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## like_to_retire (Oct 9, 2016)

sags said:


> It might be a good time to revamp the entire tax code, eliminate a plethora of tax loopholes, and institute a flat tax on all income streams....so everyone contributes their fair share.


Color me baffled. 

Myself and every other fiscal conservative in the world love the flat tax. Everyone should pay the same tax rate - Conservatives agree, but Socialists hate it.

Yet, your previous post is standard communist nonsense regarding real estate.

What are you?????????????????

ltr


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## Just a Guy (Mar 27, 2012)

I gather sags must have posted again (I blocked him personally). But, you need to remember, sags rents. I remember reading a book years ago which encouraged people to spend every dollar they had and bounce the cheque to the undertaker...sags, and a number of others here, believe in spending every dollar the country has, and you have, and that your kids will ever make...


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## Mukhang pera (Feb 26, 2016)

like_to_retire said:


> Actually, over those 30 years, considering all expenses and the increased risk over renting, that house probably hasn't been a great investment, but the left loves to spend other people's money and tax anything that moves. So sure, lets tax home ownership.
> 
> ltr


You are right, but I expect capital gains tax on our homes to come, and soon.

And one should be able to deduct all the property tax, insurance, maintenance and mortgage interest cost paid out over that 30 years, but that won't be permitted.

Years ago, I read a book by Morton Shulman. He posed a multiple choice question about capital gains tax. It asked: Capital gains tax is:

a) Tax on inflation
b) Tax on inflation
c) Tax on inflation

It is nonsense to say there has been any "gain" on a house held for years and which sells for a higher price. That higher price has the same buying power it did when the original price was paid. But, after payment of the tax, you cannot buy back what you had or buy the equivalent in groceries or anything else. 

Governments have done a great job at convincing the great unwashed into believing there is actually a real "gain" when it comes to capital gains tax.


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## Eder (Feb 16, 2011)

Its too bad Canada has a spending problem but continually stifles industries that actually would have the ability to pay Canada's debt. 

Yes we need more taxes on the next 3 generations now,too late to fix that ,but we also need to encourage businesses when they want to invest 18 billion of infrastructure rather than put up road blocks. 

The rest of the world is eating our lunch while we dither.


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## Ukrainiandude (Aug 25, 2020)

Just a Guy said:


> It also tends to be the only major saving most people have.


 Is this something that Canadian’s socialistic governments (conservatives, liberals, NDP all are socialistic) should be held accountable? First time credit home buyers etc all stimulated people to buy a house.


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## Mukhang pera (Feb 26, 2016)

And it's not that RE is not already a huge cash cow for government, far beyond what it once was. Take just property transfer tax as an example.

When I first did some real estate conveyancing as a lawyer in downtown Vancouver, the tax was calculated thus:

1/10 of 1%, plus the number of 10 thousands divided by 2, plus $19. It was that way for years. 

I paid $70,000 for my first Vancouver house. So to register the conveyance I paid 1/10 of 1% = $70 plus 7 divided by 2 = $3.50 plus $19. So the total tax was $92.50.

Today, BC Assessment puts that same house at about $2.2 million, which is probably ballpark accurate. So, what is the transfer tax today? It is calculated thus:

1% of the fair market value up to and including $200,000 = $2,000

2% of the fair market value greater than $200,000 and up to and including $2,000,000 = $36,000

3% of the fair market value greater than $2,000,000 = $6,000

So the tax on that same house today is an astonishing $44,000!

Under the "old", reasonable system, it would have been $220 + $110 + $19 = $349.

Using the BofC inflation calculator, $92.50 back in the mid-1970s would be the equivalent of $362 today. So the "old" system would still serve its purpose quite well. But what has government done to us sheep?

And I have not even mentioned the effect of GST. That was not there for years. Now it's added to a lot of things, including anything to do with real estate. It's tacked onto the fees of lawyers, accountants, realtors, etc. Taxes are now tacked onto a cup of coffee, a restaurant meal, etc. All added in modern times, all without question by those called upon to pay.

In those early days of which I speak, lotteries were illegal in Canada. Now they bring in untold millions to governments. Where has it all gone?

I think not only will capital gains tax come to all housing within the year, but also capital tax. We will all have to file statements of net worth and pay 2-5% of that annually in taxes in addition to all else.


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## Just a Guy (Mar 27, 2012)

Ukrainiandude said:


> Is this something that Canadian’s socialistic governments (conservatives, liberals, NDP all are socialistic) should be held accountable? First time credit home buyers etc all stimulated people to buy a house.


I was pointing out that this tax grab will just turn into a government expense in the future, because people won’t have any savings to pay for this and will require more government money to pay for it.


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## Ukrainiandude (Aug 25, 2020)

Just a Guy said:


> I was pointing out that this tax grab will just turn into a government expense in the future, because people won’t have any savings to pay for this and will require more government money to pay for it.


Last time I checked the health care (albeit lame) was free in socialistic Canada.


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## sags (May 15, 2010)

The Conservative idea of a "flat tax" simply isn't feasible.

It would raise taxes for low income folks and lower taxes for high income folks, while creating massive deficits.

A successful flat tax would require a significant personal deduction and a high tax rate on income from ALL sources.









GOP flat tax plans simply don't add up


The proposals from Republican candidates for a flat tax seem like a simple idea. But they simply don't add up.




www.cnbc.com


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## Just a Guy (Mar 27, 2012)

“Free“ as in paid by taxes? 

not all costs are covered long term care, many drugs, etc....


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## like_to_retire (Oct 9, 2016)

Ukrainiandude said:


> Last time I checked the health care (albeit lame) was free in socialistic Canada.


Yep, it's all free. This is how we identify socialists. They think it's free.

ltr


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## like_to_retire (Oct 9, 2016)

sags said:


> The Conservative idea of a "flat tax" simply isn't feasible.


ha ha, there it is.

ltr see


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## Ukrainiandude (Aug 25, 2020)

Just a Guy said:


> “Free“ as in paid by taxes?
> 
> not all costs are covered long term care, many drugs, etc....


Free as in no matter how much taxes you paid (could be zero, could be one million) it’s similar subpar health care with looong waiting time for everyone. As socialistic countries should be.


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## Just a Guy (Mar 27, 2012)

Ukrainiandude said:


> Free as in no matter how much taxes you paid (could be zero, could be one million) it’s similar subpar health care with looong waiting time for everyone. As socialistic countries should be.


So “free” as in no personal responsibility...


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## sags (May 15, 2010)

If only there were no "welfare" people........life would be a dream ?


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## james4beach (Nov 15, 2012)

Just a Guy said:


> It also tends to be the only major saving most people have. How do they pay for the failing health and care that they’ll need in the later years? More government handouts?


I have savings too. Why should I pay taxes on my stocks and bonds, while wealthy homeowners (sometimes with multi million $ properties) get a capital gains exemption?

Some people have retirement savings in RE. Some have it in stocks/bonds. I don't see any justification for giving a freebie to one particular group only.


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## doctrine (Sep 30, 2011)

james4beach said:


> I have savings too. Why should I pay taxes on my stocks and bonds, while wealthy homeowners (sometimes with multi million $ properties) get a capital gains exemption?
> 
> Some people have retirement savings in RE. Some have it in stocks/bonds. I don't see any justification for giving a freebie to one particular group only.


Although this an interesting line of argument, every Canadian has RRSPs and TFSAs for tax sheltered savings and yes, many people are sitting on (low) 7 digits in those accounts.


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## Mukhang pera (Feb 26, 2016)

james4beach said:


> I have savings too. Why should I pay taxes on my stocks and bonds, while wealthy homeowners (sometimes with multi million $ properties) get a capital gains exemption?
> 
> Some people have retirement savings in RE. Some have it in stocks/bonds. I don't see any justification for giving a freebie to one particular group only.


Not sure that's a fair comparison j4b. To own that principal residence, as I mentioned above, one must now pay thousands in tax up-front, even if the place later sells at a loss. Then municipal taxes must be paid on it throughout ownership and the financing costs cannot be written off. I believe one can buy stocks with borrowed money and write off the interest.

Also, one can spread sales of stocks out over time and lessen the tax burden. One cannot sell one's house and spread the imaginary "gain" out over years. It must all be brought into income in the year of sale. 

Overall, the cost of owning a house over the years is more than the cost of owning a portfolio of stocks. The latter does not attract maintenance, insurance, municipal tax, and other costs.


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## james4beach (Nov 15, 2012)

Mukhang pera said:


> Also, one can spread sales of stocks out over time and lessen the tax burden. One cannot sell one's house and spread the imaginary "gain" out over years. It must all be brought into income in the year of sale.


This is a really good point. I didn't think of that.

I think what makes the most sense is a cap gain exemption up to a certain $ value. It would be easy enough to find a fair number that covers something like 99% of primary residence values.

That would be quite fair to Canadians.


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## sags (May 15, 2010)

I don't think the Liberals will tax principal residences, but what if they "grandfather" current home owners and apply the tax to future home purchases ?

Or maybe they could return to the days of a lifetime capital gains exemption amount, regardless of what asset is used ......home, stocks, gold ?

Are people buying homes to live in or as an investment ? If the answer is both or an investment.......maybe they should pay tax on the capital gains.


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## Just a Guy (Mar 27, 2012)

james4beach said:


> I have savings too. Why should I pay taxes on my stocks and bonds, while wealthy homeowners (sometimes with multi million $ properties) get a capital gains exemption?
> 
> Some people have retirement savings in RE. Some have it in stocks/bonds. I don't see any justification for giving a freebie to one particular group only.


irronic, sags jr, that you find it ”unfair” when it’s your money, but ”fair” to take other’s money. There is a capital gains allowance for stocks as well. They don’t get the benefits of writing off the interest on investments that you could take advantage of....

finally, if sold in small enough chunks, you can get them tax free, even without all the special accounts like tfsa.


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## james4beach (Nov 15, 2012)

Just a Guy said:


> There is a capital gains allowance for stocks as well.


Wait, I'm unaware of a capital gains exemption on my stocks. Is there something like this? I never heard of something similar to the primary residence exemption, that applies to stock holdings.


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## Just a Guy (Mar 27, 2012)

I’m not an accountant, but I remember a 500k lifetime capital gains exemption for investments...it could be gone by now.houses don’t have tfsa accounts.


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## AltaRed (Jun 8, 2009)

Mukhang pera said:


> Not sure that's a fair comparison j4b. To own that principal residence, as I mentioned above, one must now pay thousands in tax up-front, even if the place later sells at a loss. Then municipal taxes must be paid on it throughout ownership and the financing costs cannot be written off. I believe one can buy stocks with borrowed money and write off the interest.
> 
> Also, one can spread sales of stocks out over time and lessen the tax burden. One cannot sell one's house and spread the imaginary "gain" out over years. It must all be brought into income in the year of sale.
> 
> Overall, the cost of owning a house over the years is more than the cost of owning a portfolio of stocks. The latter does not attract maintenance, insurance, municipal tax, and other costs.


Treat principal residences like investment real estate which is treated much like capital property. Include an implied (imputed) rental component for the revenue side (which I admit could be difficult to develop a formula). There is nothing particularly special about why PRs should be treated differently.

It is ultimately a can of worms but I sure don't have empathy for the whining of non-deductibility of real costs for PRs if there is no offset to the capital gains exemption.


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## james4beach (Nov 15, 2012)

AltaRed said:


> There is nothing particularly special about why PRs should be treated differently.


I agree with you, though @Mukhang pera does have a valid point about RE being illiquid. When you sell a house, it's one massive transaction. That part is different than owners of stocks and bonds, who have the ability to spread out the sales over time.



AltaRed said:


> It is ultimately a can of worms but I sure don't have empathy for the whining of non-deductibility of real costs for PRs if there is no offset to the capital gains exemption.


Is there any mechanism to get a one-time capital gain exemption on common equities? It seems that such an exemption exists for "qualifying small business shares" but I am not aware of any special exemption for publicly listed equities.

As far as I know, there is currently no freebie for stock capital gains except for being able apply capital losses.


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## sags (May 15, 2010)

james4beach said:


> Wait, I'm unaware of a capital gains exemption on my stocks. Is there something like this? I never heard of something similar to the primary residence exemption, that applies to stock holdings.


There was a $100,000 lifetime capital gains deduction for stocks etc until 1994. Then it was eliminated except for farms and small businesses.


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## AltaRed (Jun 8, 2009)

If RE is relatively illiquid (and I agree that is true), that is the price of playing in that sandbox. Everyone knows RE is illiquid and one chooses where they wish to focus their investing. I would not invest in RE for all the reasons mentioned. It has quite the hefty upfront commission of land transfer taxes (not $9.95 like a stock order), it has quite the large MER to hold it (not 10bp per year), it does incur various tax treatments (think distributions on REITs), and it has another hefty commission to sell it (RE commissions).

Each share of a publicly traded security is treated the same as one unit of RE. It is just that the RE unit is much larger than a publicly traded share unless it is something like BRK.A which is about the same price as a townhouse in some areas. That BRK.A share bought decades ago would have a big one time cap gains if it was sold today and I would suggest a much better investment based on minimal buy/sell commissions and no ongoing holding cost.


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## Just a Guy (Mar 27, 2012)

The nice part of real estate is it is illiquid. Makes it hard to spend the investment...forces you to make money. It’s been my experience that, the money you make owning physical real estate makes you wonder where all that money goes in a reit. Done properly, real estate is one of the best investments available, it has made more people rich than any other form of investing probably due to the leverage.


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## MrMatt (Dec 21, 2011)

One problem is that if your PR is a taxable investment, then you can write off the mortgage interest.

This has 2 main problems.
1. It encourages people to take on and maintain more debt.
2.Even at moderately low interest rates, you'll pay almost half the mortgage value in interest over the life of the mortgage. This tax savings on interest will wipe out a lot of the tax they'd get at the sale of the home. In addition, the tax that is paid happens years or decades after the tax on the interest would have been paid.
3rd smaller problem, people might hold onto properties they don't necessarily need, further tightening the housing supply.

So it won't bring in a sudden inrush of cash now, and won't dramatically increase taxes long term.
Encourages lots of bad behaviour, at the individual financial level, and negatively impacts housing availability.

Why is it a good idea? Because Big city (Toronto Vancouver) renters see this as a nice FU to homeowners.
Trudeau sees a way to make Toronto voters happy, pretend to do something, and he's too financially dumb to realize/doesn't care it doesn't help the country.


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## Retired Peasant (Apr 22, 2013)

james4beach said:


> Is there any mechanism to get a one-time capital gain exemption on common equities? It seems that such an exemption exists for "qualifying small business shares" but I am not aware of any special exemption for publicly listed equities.
> 
> As far as I know, there is currently no freebie for stock capital gains except for being able apply capital losses.


One other possibility is donating stock in-kind to charity - 0 capital gains. The donation tax credit can offset the CG on other shares you sell.


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## off.by.10 (Mar 16, 2014)

james4beach said:


> I think what makes the most sense is a cap gain exemption up to a certain $ value. It would be easy enough to find a fair number that covers something like 99% of primary residence values.


I would rather see an exemption for a certain % of annual gain (roughly inflation) as well as any major improvement work put into the house. Otherwise you're just targeting specific markets and that is even less fair than the current situation.

But that would be political suicide. So if this is introduced, it will probably be presented as a "tax on the very wealthy" and have a $ amount exclusion as you suggest which will make most voters think "oh yeah, that's not for me, but those rich bastards will pay up". Actual amount collected is unimportant.


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## Pluto (Sep 12, 2013)

sags said:


> It might be a good time to revamp the entire tax code, eliminate a plethora of tax loopholes, and institute a flat tax on all income streams....so everyone contributes their fair share.


Doesn't a "flat tax" increase tax on the poor and reduce it on the rich? Lots of rich and high income folks promote a flat tax for that very reason.


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## like_to_retire (Oct 9, 2016)

Pluto said:


> Doesn't a "flat tax" increase tax on the poor and reduce it on the rich? Lots of rich and high income folks promote a flat tax for that very reason.


haha, you don't seem to understand.

The socialist definition of a flat tax is quite a bit different than the true and actual definition.

ltr


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## Pluto (Sep 12, 2013)

MK7GTI said:


> Lets assume that that capital gains tax is introduced on primary residence, the pr on this would be nightmare for the Liberals. Trudeau doesn't have the nuts for this type of stunt. All the whinny teachers in TO with million dollar homes might actually(probably not) turn and vote Con. Besides, that move is low hanging fruit compared to cutting budgets or actually running government programs properly. Liberals wont cut government funded programs.


Yep, they are all socialists until they have to pay. Then they cut and run.


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## Pluto (Sep 12, 2013)

like_to_retire said:


> haha, you don't seem to understand.
> 
> The socialist definition of a flat tax is quite a bit different than the true and actual definition.
> 
> ltr


Sags defined it: a flat tax on all income streams. But ha ha, you didn't define it.


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## sags (May 15, 2010)

Pluto said:


> Doesn't a "flat tax" increase tax on the poor and reduce it on the rich? Lots of rich and high income folks promote a flat tax for that very reason.


Yes, unless you provide for sufficient personal exemptions, which would cover low income earners.

The problem with the Conservative model of a flat tax is that it would increase the tax on lower income earners and decrease the taxes on high income earners.......and also create a systemic deficit. It would not provide an acceptable result.

Fortunately, the configuration of a flat tax that achieves the goals could be achieved by adjusting the perimeters.


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## like_to_retire (Oct 9, 2016)

sags said:


> Yes, unless you provide for sufficient personal exemptions, which would cover low income earners.


So now it's not a flat tax, it's progressive.



sags said:


> The problem with the Conservative model of a flat tax is that it would increase the tax on lower income earners and decrease the taxes on high income earners.......and also create a systemic deficit. It would not provide an acceptable result.


Incorrect, a suitable flat tax rate would be determined so there wouldn't be a systemic deficit. It's a fair system, where unlike progressive taxation which increases tax with higher earnings, the flat tax is where everyone is taxed equally so it doesn't discourage high income earners from earning more, and the low tax rate encourages the poor to strive to earn more. It also removes loopholes which the wealthy tend to exploit. These deductions and loopholes also help the poor to find ways to avoid any taxation and so removing incentive to work.



sags said:


> Fortunately, the configuration of a flat tax that achieves the goals could be achieved by adjusting the perimeters.


That's code for soaking the higher income earners.

ltr


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## emperor (Jul 24, 2011)

So a quick question, can you have capital gains without capital losses? Because most people I know their house is worth less than what they bought it for. In Fort Mac I know some people that have lost 150k on their place. Plus CMHC has been saying they expect houses to drop. So if they put capital gain / capital losses on houses there is a possibility they wouldn't make much money. I'd say an inheritance tax would allow them to screw everyone over. That would hit the people that own anything the most, which is what they want, and would include the house without capital losses factored in.


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## Eder (Feb 16, 2011)

Inheritance tax would make bitcoin (or similar) flourish in Canada.


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## sags (May 15, 2010)

No worries.......Justin Trudeau is consulting with the expert on such matters...........


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## Pluto (Sep 12, 2013)

sags said:


> Yes, unless you provide for sufficient personal exemptions, which would cover low income earners.
> 
> The problem with the Conservative model of a flat tax is that it would increase the tax on lower income earners and decrease the taxes on high income earners.......and also create a systemic deficit. It would not provide an acceptable result.
> 
> Fortunately, the configuration of a flat tax that achieves the goals could be achieved by adjusting the perimeters.


Once you do that ,it is no longer flat and more like what we already have.


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## moderator2 (Sep 20, 2017)

I removed a post and gave a member a warning for inappropriate/foul language.

This is a thread about tax policy. There shouldn't be foul language. If there's too much aggression, I will close the thread.

Additionally, to @Fisherman30 who started this thread: what is your source? Where did this concern come from?


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## Fisherman30 (Dec 5, 2018)

moderator2 said:


> I removed a post and gave a member a warning for inappropriate/foul language.
> 
> This is a thread about tax policy. There shouldn't be foul language. If there's too much aggression, I will close the thread.
> 
> Additionally, to @Fisherman30 who started this thread: what is your source? Where did this concern come from?


Nowhere official. I've just seen several news articles lately that seem to be giving this idea some attention in Canada, and I wanted to hear everyone's thoughts.


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## moderator2 (Sep 20, 2017)

Fisherman30 said:


> Nowhere official. I've just seen several news articles lately that seem to be giving this idea some attention in Canada, and I wanted to hear everyone's thoughts.


Can you paste any links? If you remember where you saw them.


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## Just a Guy (Mar 27, 2012)

He’s not alone, I’ve seen much speculation about this idea as well...mostly on radio.


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## Money172375 (Jun 29, 2018)

moderator2 said:


> Can you paste any links? If you remember where you saw them.











Concerns about taxes on homes may be warranted


Many Canadians have come to rely on homes for financial security, so a levy on principal residences may jeopardize savings




www.theglobeandmail.com


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## off.by.10 (Mar 16, 2014)

Also Garth Turner has been going on about it ever since the requirement to report sales was put in place. See also this older blog entry.

He's wrong as often as he's right and to be read mainly for entertainment but this shows the idea is floating around. No idea if it's actually floating closer to the surface these days but it's possible someone is testing the waters.


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## Fisherman30 (Dec 5, 2018)

moderator2 said:


> Can you paste any links? If you remember where you saw them.


Why capital gains tax on principal residences is still a bad idea

Apparently a CMHC-funded study looked at it as a way of potentially making housing more affordable. I'm not trying to stir anything up here. I really enjoy using this forum. It's just something I've been hearing more and more about lately, has me a little concerned, and wanted to hear others' take on it. It's still far from being brought up in the house of commons, I'd say.


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## james4beach (Nov 15, 2012)

If we want housing to be more affordable, higher interest rates would be a great start


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## andrewf (Mar 1, 2010)

Fisherman30 said:


> So for some reason, I keep reading about the possibility of this. Anyone think this is an actual possibility? What a nightmare that would be.


Snowball's chance in hell.


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## andrewf (Mar 1, 2010)

off.by.10 said:


> Also Garth Turner has been going on about it ever since the requirement to report sales was put in place. See also this older blog entry.
> 
> He's wrong as often as he's right and to be read mainly for entertainment but this shows the idea is floating around. No idea if it's actually floating closer to the surface these days but it's possible someone is testing the waters.


Correction: Garth is wrong _far more_ often than he's right. Broken clock level.

I would take whatever Garth says, and completely disregard it. Listen to people who aren't just trying to get clicks for their pathetic blog.


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## andrewf (Mar 1, 2010)

Realistically, what revenue levers should be pulled to help dig us out of the COVID fiscal hole?

I think raising HST, perhaps by up to 5% would do it. 5% would be drastic--it would represent about $40B in revenue for the federal government. Since inflation is reasonably low at the moment, this would not cause excessive inflation. But we ought to wait for consumption to pick up before implementing this.

I could also see an increase in the capital gains inclusion rate from 50% to more like 75%.


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## Eder (Feb 16, 2011)

Raising HST will hit Trudeau's voter base in their pocket more than capital gains. I think he wants to stay in power at all costs rather than do what is good for Canada.


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## off.by.10 (Mar 16, 2014)

andrewf said:


> Correction: Garth is wrong _far more_ often than he's right. Broken clock level.
> 
> I would take whatever Garth says, and completely disregard it. Listen to people who aren't just trying to get clicks for their pathetic blog.


I was being polite ;-) Like I said, read for entertainment. And perhaps the political commentary if that's your thing.


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## andrewf (Mar 1, 2010)

Eder said:


> Raising HST will hit Trudeau's voter base in their pocket more than capital gains. I think he wants to stay in power at all costs rather than do what is good for Canada.


Going after primary residence exemption is nuclear option. And it is not necessarily even good policy to eliminate primary residence exemption. Lots of well-to-do middle class voters with inflated value homes in cities vote Liberal. HST spreads the pain and raises a lot of revenue without distorting incentives too much. We would have to raise income taxes a lot to achieve a similar pickup, and not just on higher brackets, but on the first couple brackets most taxpayers are subject to.

The bill will come due.


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## Synergy (Mar 18, 2013)

I don't think it's a great idea, but if they felt like they had to eliminate the primary residence exemption, they could add a lifetime capital gain exemption to qualifying properties. Similar to the one that applies to qualifying small business, farm, etc. transactions. This would help to target high net worth individuals. The governments will likely need to implement a variety of measures.


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## Eder (Feb 16, 2011)

You don't want high net worth people throwing in the towel on us here...there's not that many of them but they carry a large load that the rest of us would need to make up, and with our Justin debt we need hundreds of thousands of billionaires to screw over to bail us out.

Amazing ride for Canada going from 1st world toward 3rd world so quickly, but somehow we need to stop this train.


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## james4beach (Nov 15, 2012)

Eder said:


> Amazing ride going from 1st world toward 3rd world so quickly, but somehow we need to stop this train.


I agree, it's amazing how the US is deteriorating so fast, rapidly become a third world country and Banana Republic. This is an effect of decades of the ultra rich controlling US government and getting all their policies implemented (whether Republican or Democrat)... and the agenda is always the same: reduce taxes for the rich, reduce corporate taxes, and cut social programs.

The ultra rich in the US even put two of their billionnaires (Trump & Kushner) in power to push their agenda! It's outrageous that these greedy billionnaires screwed the American public and racked up enormous national debts, far worse than Canada's.

Thankfully, Canada has more fair taxation and it isn't quite as easy for the ultra rich to get away with the same tricks here. We're doing a reasonably good job preserving equality and making the rich pay their fair share. *I fully support a tax system* that is frightening enough to greedy rich people that it makes them move to the US.

That being said, I think we can still get more aggressive on taxing the extremely rich and closing loopholes in this country. I doubt that "primary residences" is a big issue, but I'm thinking more of people who hide money offshore and use elaborate interconnected corporations.


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## andrewf (Mar 1, 2010)

I think you forgot to lock one. 

kiddng


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## sags (May 15, 2010)

Pre-pandemic government revenues were higher than projected and the government could have applied the increase to the debt.

They decided to spend it on infrastructure for the long term economic benefit.

The COVID spending is temporary and isn't systemic. It will end when the pandemic is over.

After the pandemic is over, the economy will roar forward and the government will have increased revenues again.

So.......just leave the debt, pay the servicing cost, and worry about it when it matters.


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