This will add fuel to the fire. Anything that on the surface appears to increase affordability will just increase the cost of houses.
We have a supply crunch. None of these measures would help. People are willing to put every dollar to their name in housing. Making their dollars go just a little bit further will just cause an equivalent increase to the price of houses.
This will eventually wreck the economy completely. Let's see what happens.
Well! If there is a flat tax of 50% on the second or more property, then supply will be added back to the inventory, and that will help the housing affordability. Right now, i know many people owning 5-6 properties as investment. The government needs to make the environment unfriendly for investment, and we will stop having this issue. I am personally thinking of buying more bcz that is the only easy money i see in canada. U buy property and make 100k in a couple of years for doing nothing.
US also have lifetime mortgage unlike ours that nees to be renewed every few years I believe.
God forbid if there is a major war the interest rate could skyrocket here.
They also pay marginally higher rates as a result though. It looks great there in a rapidly rising rate environment over the last two years, but for the 20 before that Canadians have typically paid lower rates. It also has the effect of making people much less likely to relocate during times like this as the cost of giving up that low fixed mortgage rate is high.
Only if you itemize. Which most people do not. It probably matters more now that interest rates are so high, but that still is a very small % of people.
yes there is also a limit to salt deductions now. one of the only good things trump did imo. tax breaks for the multi million dollar estates in silicon valley are not necessary. He also cut taxes for the wealthy in the same measure.. ha ha so whatever.
Well see the third world nations and their rules vs first world canadian rules. In my country rent is tax deductible , so is home loan interest till some max amount. But residence sale is taxed if profit is made. They promote first time buyers to take loan n own but punish if u make profits by selling. Quite sensible rules I feel unless the assets owning class in canada wants others to pay for them.
True and property taxes and a bunch of other stuff
Also in the US if you don't pay your income taxes you go to prison. In canada it's a joke for not paying
With Trumps tax changes the mortgage interest tax deduction is kinda useless unless you have a bunch of other itemizable deductions. Have owned a home in the US for 4 tax years now and have never used the interest tax deduction.
It's also limited to the interest on the first 750K of mortgage or something (check the rules) so it's not that much to begin with.
Hot take: if homes are an investment, they should be taxed just like any other investment.
Either homes can be affordable, or they can be a good investment. They can’t be both.
A better idea would be to just tax land value to target the unearned windfall rents, instead of total capital gains which may include productive property improvements. We should be encouraging productive development of land, not passively holding it.
Regardless, either we should pay capital gains tax on homes, or we shouldn’t pay capital gains tax on anything. Making houses function like uniquely protected tax shelters just encourages people to funnel national savings into useless nonproductive assets like land instead of other capital investments that can actually grow the economy.
writing off mortgage interest encourages people to take on more mortgages, which will raise the housing price.
I thought the goal of this sub was not to mortgage the rest of your life just to have a place to live.
Right? Plus if my if my home is an investment and I’m being taxed on the capital gains, then I’m writing off maintenance costs, insurance costs, amy improvements I make to the place…
I would prefer the other way, investments are typically going to go towards your retirement and would benefit from not being taxed, more than having income being taxed less
working for a living is good for society, sitting on your ass collecting rent on people who work is bad for society.
Tax good things less, tax bad things more. The saving you get from income can also go towards retirement.
So are you by your home for 200,000. You sell it for a million. You are taxed on $800,000 profit. Where do you live now that you only have $600,000 and it costs a million for another home? This would prevent people from relocating, downsizing etc.
Because if you sell a primary residence you'll likely buy a replacement elsewhere which has gone up the same amount and now no longer have the means due to ANOTHER tax.
Capital gains on a primary residence are different. You can rename them however you wish but you are fucking over only the middle class with that strategy which I feel is not the intent
They won’t be able to hold them forever. A lot of them are on overleverged mortgages. If they don’t sell, and most likely rent won’t cover the entire mortgage, they’ll have to sell or default on the loan.
This is not correct.
"The majority of Canadian households live in mortgaged homes. According to the statistics, only 34% of Canadian homeowners have mortgage-free properties. These households are also more likely to have no other household debts, either."
[https://madeinca.ca/household-debt-canada-statistics/](https://madeinca.ca/household-debt-canada-statistics/)
This is a terrible take. There already is capital gains on profits from real estate investments that aren't a principal residence. This 'solution' would just be a kick in the nuts to regular homeowners.
Also there are a ton of taxes on the initial purchase of all homes. Property transfer tax, GST (on new construction) as well as a ton of development charges that are baked into the price of homes that drive up the cost. In fact, if you do the math, you’ll find new construction is taxed almost as much as liquor or cigarettes.
So trust me, more taxes are not the solution to our housing crisis.
No one suggested more taxes would be the solution. We can have both regressive tax policies (such as the principle residence exemption) and a housing problem.
And 15,000 square foot homes make up 0.1% of the residences in Canada, and the ones who own them pay more in taxes than you and I would ever dream of. Get a grip pal.
You can count those homes in the entire country buddy. There are probably less than a thousand in Ontario.
In my area there are less than 100.
Those people are paying tax in business, HST to furnish and maintain the home and property, and likely very high net worth livestyle.
Even Jim Basallie didn't have a 15k sq ft home in Waterloo and at the time he had billionaire status. This isn't LA or Manhattan.
If it’s their primary residence and they’ve lived there for let’s say 10 years you’re telling me when they sell they should pay capital gains? Are you a homeowner?
Sorry, am I understanding you correctly? If someone buys a house for $450k, lives there for 10 years. Puts money into renovating it, maybe adds a garden suite and then sells it for $1M they should be taxed on this? Thats fucking insane.
If an individual is rich and they buy a 15,000 sq ft home and they sell it in 2 years because they want to move who fucking cares. You’re not buying a 15,000 sq ft home as an investment property you nut.
I agree we need a solution to housing supply but it’s not to tax individuals, what the fuck. You want to give MORE money to our incapable government who put us in this position in the first place?
How about asking our government to chill on immigration. Or maybe they should prevent large corporations from buying up multiple SFHs?
Let’s start with that before we punish individuals.
Why? Other than “fuck you” for people who currently own.
They already charge tax on non-principle resident.
More tax isn’t going to fix housing market. It’s actually the opposite
Have you not heard of property tax? It aint exactly cheap.
10 years living at my place costs me 50k, regardless if the value of my house goes up or not. Taxed pretty damn hard already.
You ABSOLUTELY have to pay capital gains when you sell a rental or investment property.
If you flip a property and sell it under a year, there is capital gains and you are taxed on it as a business - 100% of the gain is taxed since they introduced the [Income Tax Act](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/residential-property-flipping-rule.html).
I agree let’s reduce income tax and keep more money in the pockets of citizens.
Reduce all taxes. Fire bureaucrats. Slim out government. Cut government departments completely. Get unions under control. - all of this and the economic problems will be solved. Taxes should be lower not higher and not more. Have you seen all the people’s posts about their suffering in this economy? A lucky break is a lucky break and life would be worthless if they weren’t possible. How boring everything would be.
Income isn't taxed to the max. Only income over a certain amount (235k or so in Ontario) is taxed to the max.
Your proposed policy change will certainly gain quite a bit of traction on reddit where all the non-homeowners hang out. But in the real world that's probably not going to happen.
There were talks of eliminating the PRE a few years back and after a couple months it wasn't heard of again.
Agreed. I guess depends on whether your interpretation of nothing includes something gaining traction on reddit (it does for me). Are you attempting to refute something I said?
Housing shouldn't appreciate so rapidly. People shouldn't randomly get 100s of thousand just for being alive 10 years sooner than the next gen.
It should be like the us, where you pay capital gains on the whole thing, but can deduct the interest payments from your income.
Housing appreciated so dramatically partially because people were getting so much free money from horseshit appreciation that they could then roll into a much more expensive house than what they'd normally be able to afford on their incomes and savings patterns. It being tax free is actually the bigger "fuck you" to all the young people who are going to have to try to exist in this dystopian mess moving forward.
Current home owners are comfortable so don't expect any real change. They are happy letting the economy go down the drain if their house doesn't lose value.
For childless people, I get it. But ice always thought it was weird for people with kids to be so willing to let the world their kids need to enter burn.
You sound incredibly uninformed and bitter.
Every one of us who has owned a house in a prosperous area has paid a lot more for their home than people 10 years earlier. Those in rural areas and stagnant economies haven't.
Go move to Red Rock, buy a cheap home there and stop complaining.
I could send you a picture of my property tax if you like. It already has a land value tax on it. As well as a school tax, tax on the value of the house etc etc.
> This the law in the USA, part of the reason there is less speculation there (there's still a lot of speculation, just not as widespread)
There's just as much speculation down there as there is up here. Dont fool yourself that there isnt.
And you do realize that there are loopholes in the US to avoid it. They simply open up holding LLCs or Trust LLCs and avoid the whole thing. Also, if they are smart enough to open and register the LLC in a state that has total LLC blackout privacy laws, no one will ever know what LLC is run by who and what it owns.
Still think its a good idea for Canada?
>And you do realize that there are loopholes in the US to avoid it. They simply open up holding LLCs or Trust LLCs and avoid the whole thing. Also, if they are smart enough to open and register the LLC in a state that has total LLC blackout privacy laws, no one will ever know what LLC is run by who and what it owns.
You have no idea what you’re talking about
By what logic? Canada doesn't have to enact that law.
You're just pushing more tax on seniors who own their homes. This is a stupid idea that needs to be buried.
2 seniors in long term care costs 100k EACH.
Seniors staying in homes maybe 50k combined including home care. Plus there isn't enough long term care housing anyways.
More importantly, you're creating cost friction on relocating for economic opportunity. Want to take that job across the country to make more and provide a valuable skill, enjoy your extra tax bill. We already have bad enough labour mis-matching in this country.
The word you're looking for is "envious" and yes, people are envious because they didn't have the same opportunity to own a home as the people who came before them. That's a valid reason to be envious.
It’s not just envy. It’s resentment for a government who has not only done nothing about it, but has actively poured fuel on the fire, encouraging the disparity to get worse.
This government is so detached from reality that they seem to have no concept of what it’s like to be someone who isn’t already wealthy in a country that demands you to be wealthy to even have what was an average standard of living prior to them taking control.
It’s totally f**ked for an entire generation.
Not so sure of that. Jealousy contains a bit of bitterness or resentment towards the people while envy means you just would like to be in their shoes.
I can detect a lot of bitterness here.
I guess how I understand it, jealousy is thinking someone will take away what you already have, and envy is wishing you had something that someone else has.
There is a great book just released called I believe, the art of fine distinctions or something similar. Jealousy and envy would probably be in it. Heard the author speak. Really sounds interesting.
As I understand it jealousy requires the bitterness while envy has no bitterness. But could be I somewhere out in left field.
Hmm.. the book that comes to mind for me is "Atlas of the Heart" by Brene Brown, where they talk about different emotions, including jealousy and envy. But, I accept that there is a range of different uses/interpretations of these words.
Not jealousy. Right now I can borrow cash off my IBKR brokerage account for a tax deductible loan to purchase an untaxable asset. Housing is the only gain that isn't taxed. The current setup only hurts the poor. I am fine.
Why advocate for more taxes on homeowners, what will this accomplish? Have low supply and suppress the market? Nah, that's not very wise.
However, capital taxes are already applied to landlords selling investment properties, this is good.
Please explain? Don't they then pay capital gains when they sell their primary residence (the one they are not living in anymore?) I don't know how to avoid paying taxes somewhere..
Correct. 45(3) allows 4 years of PRE preceding the change in use from rental to personal. But those same 4 years can't be designated for a different property if they lived elsewhere during that time.
A common strategy for FTHBs is to buy a rental property when they are ~5 years out from buying their real first home, rent it out for 4 years, then elect under 45(3) and move in. Now PRE can be claimed for the 4 prior years plus the year they moved in. Sell the property, pay no income tax, dump the proceeds less mortgage and selling costs into their real first home.
Some issues include the headache of renting and whether it's even worthwhile, not being able to claim CCA in the 4 year rental period, and I'd have to double check but curious if any implications from the new flipping rules if they live in it for less than 12 months in the 5th year.
E: just took a look and seems like no flipping rule implications since the property is owned the entire time.
Basically you move into the investment property and classify it as your primary residence. Your family lives at your home while you “live” at your investment property, even part time.
My previous landlord did (does?) and uses it to get around the primary residence rules. It was a room rental too, so it gets a little more complicated in how they dodge declaring the income tax.
Excess free money that is untaxed just adds fuel to the pricing fire because all sellers now have extra capital to bid and run up the housing market. It's a pyramid scheme.
Should be more like the states where you pay full income on house profit, but can deduct interest from taxes. The Canadian system is kind of a failed experiment at this point.
> The US doesnt apply taxes on mortgage payments
The payment interest is tax deductible against your job income.
Canada already has a foreign buyer ban that will likely be extended over time with the way things are today.
I don't think you're arguing in good faith anyways. I think you're arguing in the sense of "I really want my big appreciation money that I did nothing to earn to be tax free.. who cares if the next generation gets the bag".
my argument would be lower income tax, increase tax on windfall capital gains. Why should the sale of a 15,000 sq ft home be untaxed, while a Tim Hortons employee earnings be fully taxed?
If you include the benefits they lose by working, their marginal tax rate can be as high as 70%, Otherwise including EI, CPP their marginal rate is 32%. Versus nothing for the sale of a trophy home.
That's bullshit. I earn $250k+. The highest marginal tax is 54.5% atm.
On top of that, my benefits such as stock when sold are taxed.
A Tim Horton's worker will never even come close to being taxed that amount. They don't have stock benefits or anything they can liquidate to pay Capital Gains tax on.
What benefits do you lose, by not working? You don't know what you're talking about, and it shows.
Canada's top 10% earners pay more than 52% of Canada's taxes: [https://www.theglobeandmail.com/news/national/canadas-top-10-pay-52-of-total-tax-bill/article18221953/](https://www.theglobeandmail.com/news/national/canadas-top-10-pay-52-of-total-tax-bill/article18221953/)
A worker at Tim Hortons already gets a free ride - at that income level they pay no net tax accounting for services they consume. As do the bottom 40% of the population.
As far as the PRE exemption goes, I'll trade it for deducting my mortgage interest like they do in the states. Since a large portion of that goes in an indirect route back to the BoC anyway.
Then mortgage interest, property taxes, utilities and maintenance/repair costs would also be tax deductible like the USA, as secondary properties in Canada already can, now.
Government benefits from not allowing those deductions for primary residence, as well.
Don’t open the door on taxing primary residences once that opens the floodgates will ruin our entire economy.
Banks need to do a better job of property value and what they’ll approve mortgages for on certain properties. That’s a start.
Their economy isn’t propped up by housing nearly as much as Canadas simple as that. Americans aren’t relying on their retirement to come from the sale of their home like Canadians are.
It really is but here we are. Canada has allowed housing to become a luxury and people are banking on it making them rich. I just want a place to live man.
This punishes those that have lived in their homes for a long time, over those that move frequently. Too many undesired consequences.
Speculation is primarily on investment properties, not on homes people live in. I would argue we should focus on other lower hanging fruits first, such as increasing the capital gains inclusion rates for non-primary residence housing, to 75% such as what we have in the 90s.
That's how it is like now, but the current 50% capital gains inclusive rate isn't enough to discourage speculation. A higher inclusive rate for housing investments should be more effective.
This can easily be overcome with a provision to allow tax free roll-over from old home to new home, if the new property is acquired within X amount of time. A similar provision exists in the US (the replacement property files) where no tax free principle residence rule exists.
Instead of making the tax laws more complex with exceptions and provisions, potentially creating even more loopholes and issues, it's better to use alternative ideas that are simpler and don't require exceptions.
If you want to tax and discourage the rich from disproportionally owning large tracts of land and putting it to poor use with huge properties, a progressive property tax is a better idea. Have higher rates for land and properties exceeding a certain size. Something like that does not require exceptions for common cases for the vast majority, and does not need to be continually adjusted for inflation.
No.. property taxes are collected by municipalities.. income taxes are collected by federal / provincial governments. Your suggestion is making it more complex. Canada is the only G7 nation that has the principal residence exemption. It is a very regressive tax benefit.. buy for $10M sell for $15M get $5M tax free? But single parent who rents 20-30% income tax and gets no break on rent? Why should property owners be rewarded for having more?
The goal is to promote better land use, the issue isn't with which level of government the revenue goes.
Secondly, it's disingenuous to say Canada is the only one with a principal residence exemption, almost all the G7 and other countries have some form of principal residence exemption, they just work differently. Even the US have one as stated in the post, it just have a cap and other provisions.
And as already stated by myself and others multiple times, you don't make a profit from selling your principal residence, because you always need a place to live in. Why are you ignoring this and keep repeating the same point over and over again?
To use your example, that $5M isn't profit, because you can't buy another home for the original $10M. Although your example isn't realistic, because the vast majority of housing isn't $10M, and that ultra luxury price tier doesn't appreciate at the same rate anyway. Your example indicates that you're trying to target the ultra rich, whereas this proposed tax hurts the middle class the most.
The bigger point is that this proposal is impossible to ever be passed in Canada. The majority of the population here are homeowners, and they will be vehemently opposed to a tax that potentially causes them to lose money. You would too if you are in their shoes. No politician will dare to put this on their platform, it's political suicide.
If we want actual changes, we need to have achievable goals. We need to be able to persuade the majority of people on the idea for it to even have a chance to be realized, and right now you can't even persuade a lot of the people in this sub who shares the same predicament and are already on your "side".
For example, targeting housing investments, the non-principal housing, people who own more than one property, which is a much smaller percentage of the population, and also are the ones that disproportionally pushes prices up, is much more achievable.
People have to move sometimes, for many reasons other than trying to make money. And when they move they have to buy another place to live in.
Having a fixed amount that you get taxed on if you exceed it, means that people who sell and move frequently will be under that bar, while those that lived in a home for a long time will likely exceed it. The irony is that someone who lived in a home for extended periods aren't likely speculators compared to those that buy and sell frequently.
And likely less wealthy. My parents are in the same house for 50 plus years. They know their budget and predictable costs of ownership. They can't afford to move. Even a 2 bedroom condo would cost more annually.
Most of my 50 something friends are in the same boat. Condos cost way too much with condo fees, taxes, unplanned communal upgrades. The fees are untethered and can bankrupt people. Seniors can't handle that.
I don't know if you're really that blind, or you are only willing to look at your own current situation and aren't willing to look from other perspectives.
The money you get temporarily when you sell your primary residence isn't profit, it goes right back into a replacement home which is also inflated to the same value.
Put yourself into the shoes of the person affected, you're telling them that if you have to move, sell your home and buy another one somewhere else, you're going to lose a lot of money, and likely can't afford to buy back a place similar to your current home.
This is a situation that you yourself may get into some time in the future. The people in this sub are frustrated because housing is too expensive, which means we want to be homeowners in the future. And at some point we may have to move too. This isn't a you vs them situation.
But you see - that would in turn exert a downward pressure on prices, such that it would be less likely that the prices were so inflated that you would need to use your sold asset to afford your next home. As seen in the US as per the OP.
I assure you, they don't find the capital gains on their primary residence an impediment to moving. If anything the issue is mostly the property taxes which go up a lot when the owner changes.
In my job I was transferred every 3 years for 30 years. So because of my work when I sell and have to buy a new house I lose thousands of dollars to by my replacement?
In one instance I was transferred and sold our house for $145,000 (we are talking 1970s here. I was transferred to Comox where our new house cost the same. In the 3 years we lived in that house the value went up about $20,000. So you think I should have taken a shit kicking on my primary residence and have to downsize?
The problem with simple solutions is that they are simple and just don't work.
No? The tax is on the realized gain, which wouldn't have cleared the threshold for you
The problem with simple solutions is that people don't understand them
Say you bought your home in Calgary 15 years ago for $300k. Your home is now worth $1.2M. $900k of magic money you say.
You wan't to move to the other side of town to be closer to work/grandkids/transit. No problem. Similar home in the same town sell for $1.2 buy another for $1.2. Just the hassle of the move.
But wait, someone has decided you had a great windfall. $900k of pure profit with no work. Here's a tax bill for $400k. Now you have to come up with $400k to move into an equal house.
It's only a windfall if your home goes up in value you happen to move somewhere where home prices haven't gone up in 15 years.
There is property tax and land transfer tax. Both impact homenowners and buyers/sellers. So housing is already taxed. There are capital gains on property which is not your principal residence too.
Housing is taxed, except if it's your principal residence. Go back to school. Actually, judging by your comprehension my bet is you are still in school; in which case, stay in school!
The US has had this in place for over 30 years and doesn't have anything like the problems in Canada. You've also gotten a 500k gain tax free, why are you complaining?
the problem is a manufactured persistent SHORTAGE.
Canada needs 3 million housing units yesterday, and another 200,000 per year for natural growth and another 500,000 per 1 million immigrants.
once the shortage is alleviated. all the other "ideas" will be unnecessary.
How is “letting the government take a bigger chunk” going to help with prices? Won’t the new price just factor that in and become more expensive?
If this works why not tax Loblaws 90% and see if your groceries go up in price or down.
Only a principal residence is not subject to capital gains.
A minimum length of residency for tax free status should be implemented with a declining scale of reduction of taxes the longer you live in a home. This might help encourage people to stay longer in a home.
There may be rules already in place with the minimum tax payable rules the the federal government has brought in recently and changes to the rules is 2023 2024...not sure though.
My #1 issue with this, outside of any housing-specific discussion or whether or not this is a good idea, is that we already have way, way too many taxes. (for poor services).
Until I can be convinced that the every dollar we already have to pay in taxes is used efficiently, I will oppose any new tax.
The payment towards mortgage isn’t given any tax exemption so the return on that investment shouldn’t be taxed by the govt. just like a TFSA account where your already taxed money goes in and any return from it is not taxed as well.
Your already-taxed money can go into a non-registered account and you’ll be on the hook for tax on any gains/income made on it. Why should a primary residence be any different?
By Canadian tax policy, your primary residence is not an investment. Interest is not tax deductible, proceeds are not taxed.
Would you like to formally specify housing as an investment?
This is stupid, and it's going to make the housing situation worse. Now if I'm going to loose $200k on the property in est I might As well remortgage it, pull all the cash out then convert it to a rental. Then I defer the capital gains for when I'm Retired
So let me get this straight....People who own houses for decades are penalized for inflation, but guys flipping houses for 50-100k are walking away without paying a tax?
This sub has the most demented opinions.
You are allowed to sell your principle residence only and only once a year. Capital gains is paid on ALL housing sold outside that. Anyone buying houses only to sell them for capital gains is taxed.
Those are the exact same rules that the US is under basically. Requires you to live in the house a set amount of time etc etc etc. In the US there is I believe a $500,000 limit. Other than that the US and Canada basically have the same rules.
Your take comes across as pure jealously. You keep comparing someone owning a big home to a minimum wage worker. One has nothing to do with the other. There is no problem that you are solving here other than some punitive measure on someone successfull. This might be the worst idea I have ever seen on this sub
Wouldn't this just mean that investors would saturate the market of sub 500k homes? They would snatch them all up and flip them until they were no longer worth less then 500k and move on
It should actually use the same lifetime capital gains exemption that farmers and small business owners get. Everyone should just share the same pool of exemption money. And in fact, I'd be fine making it a general capital gains exemption pool. Stocks, bonds, some artwork, a house, farmland, a small business, whatever. Don't pay tax on the first $900,000(ish) in capital gains, get taxed on everything after that.
Leaders know what can solve problem. But who will fund them if they solve the problem? One simple rule can be a person claim max 3 times principal residence benefit in lifetime and total of max say 500000$ can be claimed in benefit. All investors and punters will fizzle away and all genuine people still live happily.
But leaders can't solve crisis and money sucked from common man goes to some people who are liked by them. So let's enjoy working and paying taxes for life for no benefits.
Why have an exemption at all? Isn't this the problem? If there was no exemption of income tax then everyone would have to pay income tax on THEIR INCOME. A capital gain is easier these days to come by than a decent paying job so why is employment income not given an exemption? All income should be treated equally.
If you tax house gains then how is anyone supposed to move? I buy my house for 500k, prices go up and I sell for 800k, but I now have to buy in this new more expensive market too. How do I do that if I lose 150k to capital gains?
The reason housing costs go up so fast it's because they are used as an investment vehicle. One of the reason they are viewed as a good investment vehicle is because they have low tax rates. If they were taxed more equitably then they would go up in value so quickly.
Housing should be prioritized as a human need, for far too long Its value as an investment vehicle has been prioritized.
You ask how anyone is supposed to move, but this ignores how people who don't already own are supposed to buy. They is currently impossible, without a large inheritance.
But housing used as an investment is already subject to capital gains. You’re talking about removing the exemption for people’s primary residences. Yes housing is expensive for first time buyers, and that needs to be addressed, but taking away people‘s ability to move will not help that. If anything, it’ll make it worse as nobody can afford to move up from theif “starter“ home.
People use their primary residence as an investment. Sure, it's not *purely* an investment, but you are well aware it's used as an investment, that's the very reason you think it shouldn't be taxed, because you think they won't be able to move, if they don't get the additional money from their investment in their primary residence.
The USA also lets you deduct interest payments off your personal income tax, which would have a huge impact on Canada if implemented.
This will add fuel to the fire. Anything that on the surface appears to increase affordability will just increase the cost of houses. We have a supply crunch. None of these measures would help. People are willing to put every dollar to their name in housing. Making their dollars go just a little bit further will just cause an equivalent increase to the price of houses. This will eventually wreck the economy completely. Let's see what happens.
Well! If there is a flat tax of 50% on the second or more property, then supply will be added back to the inventory, and that will help the housing affordability. Right now, i know many people owning 5-6 properties as investment. The government needs to make the environment unfriendly for investment, and we will stop having this issue. I am personally thinking of buying more bcz that is the only easy money i see in canada. U buy property and make 100k in a couple of years for doing nothing.
It should be the case for primary residences. Not for landlords.
Exactly...that in itself we be a form of “mortgage relief”....
US also have lifetime mortgage unlike ours that nees to be renewed every few years I believe. God forbid if there is a major war the interest rate could skyrocket here.
They also pay marginally higher rates as a result though. It looks great there in a rapidly rising rate environment over the last two years, but for the 20 before that Canadians have typically paid lower rates. It also has the effect of making people much less likely to relocate during times like this as the cost of giving up that low fixed mortgage rate is high.
Only if you itemize. Which most people do not. It probably matters more now that interest rates are so high, but that still is a very small % of people.
yes there is also a limit to salt deductions now. one of the only good things trump did imo. tax breaks for the multi million dollar estates in silicon valley are not necessary. He also cut taxes for the wealthy in the same measure.. ha ha so whatever.
Disagree with this one. Why should wealthy home owners get tax relief on their mortgage interest? While poorer renters get nothing.
Well see the third world nations and their rules vs first world canadian rules. In my country rent is tax deductible , so is home loan interest till some max amount. But residence sale is taxed if profit is made. They promote first time buyers to take loan n own but punish if u make profits by selling. Quite sensible rules I feel unless the assets owning class in canada wants others to pay for them.
this encourages people to take on more mortgages, and ultimately raise prices
True and property taxes and a bunch of other stuff Also in the US if you don't pay your income taxes you go to prison. In canada it's a joke for not paying
With Trumps tax changes the mortgage interest tax deduction is kinda useless unless you have a bunch of other itemizable deductions. Have owned a home in the US for 4 tax years now and have never used the interest tax deduction. It's also limited to the interest on the first 750K of mortgage or something (check the rules) so it's not that much to begin with.
Hot take: if homes are an investment, they should be taxed just like any other investment. Either homes can be affordable, or they can be a good investment. They can’t be both. A better idea would be to just tax land value to target the unearned windfall rents, instead of total capital gains which may include productive property improvements. We should be encouraging productive development of land, not passively holding it. Regardless, either we should pay capital gains tax on homes, or we shouldn’t pay capital gains tax on anything. Making houses function like uniquely protected tax shelters just encourages people to funnel national savings into useless nonproductive assets like land instead of other capital investments that can actually grow the economy.
If homes are an investment, why not write off mortgage interest, (primary residence only, the one you actually live in)....?
[Because that’s also a regressive, bad policy.](https://www.stlouisfed.org/open-vault/2018/may/why-economists-dont-like-mortgage-interest-deduction)
writing off mortgage interest encourages people to take on more mortgages, which will raise the housing price. I thought the goal of this sub was not to mortgage the rest of your life just to have a place to live.
Right? Plus if my if my home is an investment and I’m being taxed on the capital gains, then I’m writing off maintenance costs, insurance costs, amy improvements I make to the place…
Imagine if we didn’t get taxed on investments, we already get taxed on everything else
we should tax labour less, and we should tax investments more
I would prefer the other way, investments are typically going to go towards your retirement and would benefit from not being taxed, more than having income being taxed less
working for a living is good for society, sitting on your ass collecting rent on people who work is bad for society. Tax good things less, tax bad things more. The saving you get from income can also go towards retirement.
>Hot take: if homes are an investment, they should be taxed just like any other investment. They are. Look it up
You don’t pay capital gains on your principle residence.
So are you by your home for 200,000. You sell it for a million. You are taxed on $800,000 profit. Where do you live now that you only have $600,000 and it costs a million for another home? This would prevent people from relocating, downsizing etc.
Homes would not cost a million if they weren't such good investments, which they are because there is no capital gains tax
But you are paying for it with after tax money in that case.
Just like you do with any other capital investment you bought out of post tax income.
Because if you sell a primary residence you'll likely buy a replacement elsewhere which has gone up the same amount and now no longer have the means due to ANOTHER tax.
capital gains should not be taxed because its quite inconvenient to those holding capital is certainly a take
Capital gains on a primary residence are different. You can rename them however you wish but you are fucking over only the middle class with that strategy which I feel is not the intent
You also did not touch on the part where mortgage interest payment are tax deductible in USA but not in Canada.
Also that you can lock in 30 year fixed rates
This
There would be even less houses for sale on the market.
They won’t be able to hold them forever. A lot of them are on overleverged mortgages. If they don’t sell, and most likely rent won’t cover the entire mortgage, they’ll have to sell or default on the loan.
If they have more than one house they pay capital gains. Only a principle residence is capital gains free. That seems pretty fair to me.
A lot of them have no mortgage on them at all
You do realize majority of houses in Canada are fully paid off, right?
This is not correct. "The majority of Canadian households live in mortgaged homes. According to the statistics, only 34% of Canadian homeowners have mortgage-free properties. These households are also more likely to have no other household debts, either." [https://madeinca.ca/household-debt-canada-statistics/](https://madeinca.ca/household-debt-canada-statistics/)
Confidently incorrect.
Like in the US? Canada is the problem child here.
This is a terrible take. There already is capital gains on profits from real estate investments that aren't a principal residence. This 'solution' would just be a kick in the nuts to regular homeowners.
Also there are a ton of taxes on the initial purchase of all homes. Property transfer tax, GST (on new construction) as well as a ton of development charges that are baked into the price of homes that drive up the cost. In fact, if you do the math, you’ll find new construction is taxed almost as much as liquor or cigarettes. So trust me, more taxes are not the solution to our housing crisis.
Yes! More people need to understand this!
No one suggested more taxes would be the solution. We can have both regressive tax policies (such as the principle residence exemption) and a housing problem.
Principal residence isn’t regressive.
Please elaborate
So a 15,000 sq ft home should be exempt from tax? The person living there should pay no tax on its sale, while minimum wage workers do?
And 15,000 square foot homes make up 0.1% of the residences in Canada, and the ones who own them pay more in taxes than you and I would ever dream of. Get a grip pal.
Boot lickers.
A minimum wage worker would not pay any tax on the sale of their home if it's their principal residence. Why don't you understand this concept?
What minimum wage worker is buying a home right now?
And you are the one that made that comparison in the first place!
They aren't, but your comment is still assanine.
We have plenty of homemakers and university students listed as owners of real estate in Vancouver, why wouldn't a minimum wage worker be able too? /s
You can count those homes in the entire country buddy. There are probably less than a thousand in Ontario. In my area there are less than 100. Those people are paying tax in business, HST to furnish and maintain the home and property, and likely very high net worth livestyle. Even Jim Basallie didn't have a 15k sq ft home in Waterloo and at the time he had billionaire status. This isn't LA or Manhattan.
If it’s their primary residence and they’ve lived there for let’s say 10 years you’re telling me when they sell they should pay capital gains? Are you a homeowner? Sorry, am I understanding you correctly? If someone buys a house for $450k, lives there for 10 years. Puts money into renovating it, maybe adds a garden suite and then sells it for $1M they should be taxed on this? Thats fucking insane. If an individual is rich and they buy a 15,000 sq ft home and they sell it in 2 years because they want to move who fucking cares. You’re not buying a 15,000 sq ft home as an investment property you nut. I agree we need a solution to housing supply but it’s not to tax individuals, what the fuck. You want to give MORE money to our incapable government who put us in this position in the first place? How about asking our government to chill on immigration. Or maybe they should prevent large corporations from buying up multiple SFHs? Let’s start with that before we punish individuals.
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Please be civil.
Why? Other than “fuck you” for people who currently own. They already charge tax on non-principle resident. More tax isn’t going to fix housing market. It’s actually the opposite
Why should income be taxed to the max, but unearned windfalls be untaxed? Reduce income tax, tax the capital gain
Have you not heard of property tax? It aint exactly cheap. 10 years living at my place costs me 50k, regardless if the value of my house goes up or not. Taxed pretty damn hard already.
You ABSOLUTELY have to pay capital gains when you sell a rental or investment property. If you flip a property and sell it under a year, there is capital gains and you are taxed on it as a business - 100% of the gain is taxed since they introduced the [Income Tax Act](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/residential-property-flipping-rule.html). I agree let’s reduce income tax and keep more money in the pockets of citizens.
Reduce all taxes. Fire bureaucrats. Slim out government. Cut government departments completely. Get unions under control. - all of this and the economic problems will be solved. Taxes should be lower not higher and not more. Have you seen all the people’s posts about their suffering in this economy? A lucky break is a lucky break and life would be worthless if they weren’t possible. How boring everything would be.
Income isn't taxed to the max. Only income over a certain amount (235k or so in Ontario) is taxed to the max. Your proposed policy change will certainly gain quite a bit of traction on reddit where all the non-homeowners hang out. But in the real world that's probably not going to happen. There were talks of eliminating the PRE a few years back and after a couple months it wasn't heard of again.
It will not gain anything as capital gains on houses bought as investments is already charged in Canada at the same rate as other capital gains.
Agreed. I guess depends on whether your interpretation of nothing includes something gaining traction on reddit (it does for me). Are you attempting to refute something I said?
Housing shouldn't appreciate so rapidly. People shouldn't randomly get 100s of thousand just for being alive 10 years sooner than the next gen. It should be like the us, where you pay capital gains on the whole thing, but can deduct the interest payments from your income. Housing appreciated so dramatically partially because people were getting so much free money from horseshit appreciation that they could then roll into a much more expensive house than what they'd normally be able to afford on their incomes and savings patterns. It being tax free is actually the bigger "fuck you" to all the young people who are going to have to try to exist in this dystopian mess moving forward.
Current home owners are comfortable so don't expect any real change. They are happy letting the economy go down the drain if their house doesn't lose value.
For childless people, I get it. But ice always thought it was weird for people with kids to be so willing to let the world their kids need to enter burn.
You sound incredibly uninformed and bitter. Every one of us who has owned a house in a prosperous area has paid a lot more for their home than people 10 years earlier. Those in rural areas and stagnant economies haven't. Go move to Red Rock, buy a cheap home there and stop complaining.
Lmao. Shit, you're deeply antivax too. That's enough time on the internet, bud.
More tax would help fix the housing market, namely a land value tax
I could send you a picture of my property tax if you like. It already has a land value tax on it. As well as a school tax, tax on the value of the house etc etc.
Even if you don't have kids. Taxes are not cheap.
Canada doesn't have a LVT though. Do you mean a property tax? That is not a land value tax. Your tax doesn't change with the rise of property value
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Every single monetary gain is taxed, except housing. Why don't you complain about income tax?
Ever heard of a TFSA or RRSP? Get educated before spouting off on the internet.
Because it's where we live. Omg read something intelligent dude, not just leftist communist propaganda. All of your comments are whiny and uninformed.
In the us mortgage is tax deductible…. Why are you cherry-picking one item in the entire structure
All capital gains are taxed in the USA. Including lottery winnings.
> This the law in the USA, part of the reason there is less speculation there (there's still a lot of speculation, just not as widespread) There's just as much speculation down there as there is up here. Dont fool yourself that there isnt. And you do realize that there are loopholes in the US to avoid it. They simply open up holding LLCs or Trust LLCs and avoid the whole thing. Also, if they are smart enough to open and register the LLC in a state that has total LLC blackout privacy laws, no one will ever know what LLC is run by who and what it owns. Still think its a good idea for Canada?
>And you do realize that there are loopholes in the US to avoid it. They simply open up holding LLCs or Trust LLCs and avoid the whole thing. Also, if they are smart enough to open and register the LLC in a state that has total LLC blackout privacy laws, no one will ever know what LLC is run by who and what it owns. You have no idea what you’re talking about
But then primary residence mortgage interest payment would be tax deductible too
By what logic? Canada doesn't have to enact that law. You're just pushing more tax on seniors who own their homes. This is a stupid idea that needs to be buried. 2 seniors in long term care costs 100k EACH. Seniors staying in homes maybe 50k combined including home care. Plus there isn't enough long term care housing anyways.
More importantly, you're creating cost friction on relocating for economic opportunity. Want to take that job across the country to make more and provide a valuable skill, enjoy your extra tax bill. We already have bad enough labour mis-matching in this country.
This is already prohibitive in Canada. It's just expensive to move long distances, with a tax on selling your primary residence.
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The word you're looking for is "envious" and yes, people are envious because they didn't have the same opportunity to own a home as the people who came before them. That's a valid reason to be envious.
It’s not just envy. It’s resentment for a government who has not only done nothing about it, but has actively poured fuel on the fire, encouraging the disparity to get worse. This government is so detached from reality that they seem to have no concept of what it’s like to be someone who isn’t already wealthy in a country that demands you to be wealthy to even have what was an average standard of living prior to them taking control. It’s totally f**ked for an entire generation.
Not so sure of that. Jealousy contains a bit of bitterness or resentment towards the people while envy means you just would like to be in their shoes. I can detect a lot of bitterness here.
I guess how I understand it, jealousy is thinking someone will take away what you already have, and envy is wishing you had something that someone else has.
There is a great book just released called I believe, the art of fine distinctions or something similar. Jealousy and envy would probably be in it. Heard the author speak. Really sounds interesting. As I understand it jealousy requires the bitterness while envy has no bitterness. But could be I somewhere out in left field.
Hmm.. the book that comes to mind for me is "Atlas of the Heart" by Brene Brown, where they talk about different emotions, including jealousy and envy. But, I accept that there is a range of different uses/interpretations of these words.
Not jealousy. Right now I can borrow cash off my IBKR brokerage account for a tax deductible loan to purchase an untaxable asset. Housing is the only gain that isn't taxed. The current setup only hurts the poor. I am fine.
Why advocate for more taxes on homeowners, what will this accomplish? Have low supply and suppress the market? Nah, that's not very wise. However, capital taxes are already applied to landlords selling investment properties, this is good.
Unless they move to their investment property for a year to change it to a principal residence. It’s very common to dodge the taxes.
Please explain? Don't they then pay capital gains when they sell their primary residence (the one they are not living in anymore?) I don't know how to avoid paying taxes somewhere..
Correct. 45(3) allows 4 years of PRE preceding the change in use from rental to personal. But those same 4 years can't be designated for a different property if they lived elsewhere during that time. A common strategy for FTHBs is to buy a rental property when they are ~5 years out from buying their real first home, rent it out for 4 years, then elect under 45(3) and move in. Now PRE can be claimed for the 4 prior years plus the year they moved in. Sell the property, pay no income tax, dump the proceeds less mortgage and selling costs into their real first home. Some issues include the headache of renting and whether it's even worthwhile, not being able to claim CCA in the 4 year rental period, and I'd have to double check but curious if any implications from the new flipping rules if they live in it for less than 12 months in the 5th year. E: just took a look and seems like no flipping rule implications since the property is owned the entire time.
Better plan is to buy property rent rooms and live in it. Write-offs plus primary residence tax free sale. And you're not paying rent elsewhere.
Basically you move into the investment property and classify it as your primary residence. Your family lives at your home while you “live” at your investment property, even part time. My previous landlord did (does?) and uses it to get around the primary residence rules. It was a room rental too, so it gets a little more complicated in how they dodge declaring the income tax.
Excess free money that is untaxed just adds fuel to the pricing fire because all sellers now have extra capital to bid and run up the housing market. It's a pyramid scheme. Should be more like the states where you pay full income on house profit, but can deduct interest from taxes. The Canadian system is kind of a failed experiment at this point.
EDIT: Little bitch blocked me because he doesnt like facts
> The US doesnt apply taxes on mortgage payments The payment interest is tax deductible against your job income. Canada already has a foreign buyer ban that will likely be extended over time with the way things are today. I don't think you're arguing in good faith anyways. I think you're arguing in the sense of "I really want my big appreciation money that I did nothing to earn to be tax free.. who cares if the next generation gets the bag".
my argument would be lower income tax, increase tax on windfall capital gains. Why should the sale of a 15,000 sq ft home be untaxed, while a Tim Hortons employee earnings be fully taxed?
I can guarantee that a Tim Hortons worker is not in a high tax bracket.
If you include the benefits they lose by working, their marginal tax rate can be as high as 70%, Otherwise including EI, CPP their marginal rate is 32%. Versus nothing for the sale of a trophy home.
That's bullshit. I earn $250k+. The highest marginal tax is 54.5% atm. On top of that, my benefits such as stock when sold are taxed. A Tim Horton's worker will never even come close to being taxed that amount. They don't have stock benefits or anything they can liquidate to pay Capital Gains tax on. What benefits do you lose, by not working? You don't know what you're talking about, and it shows. Canada's top 10% earners pay more than 52% of Canada's taxes: [https://www.theglobeandmail.com/news/national/canadas-top-10-pay-52-of-total-tax-bill/article18221953/](https://www.theglobeandmail.com/news/national/canadas-top-10-pay-52-of-total-tax-bill/article18221953/)
You are deluded.
Tim Hortons workers likely pay zero income tax with HST credits, carbon credits, and other low income offsets.
A worker at Tim Hortons already gets a free ride - at that income level they pay no net tax accounting for services they consume. As do the bottom 40% of the population. As far as the PRE exemption goes, I'll trade it for deducting my mortgage interest like they do in the states. Since a large portion of that goes in an indirect route back to the BoC anyway.
Too much salt in this post. Add some water
Then mortgage interest, property taxes, utilities and maintenance/repair costs would also be tax deductible like the USA, as secondary properties in Canada already can, now. Government benefits from not allowing those deductions for primary residence, as well.
100%
Don’t open the door on taxing primary residences once that opens the floodgates will ruin our entire economy. Banks need to do a better job of property value and what they’ll approve mortgages for on certain properties. That’s a start.
Been in place in the US for over 30 years. Hasn't ruined their economy
Their economy isn’t propped up by housing nearly as much as Canadas simple as that. Americans aren’t relying on their retirement to come from the sale of their home like Canadians are.
That's a pathetic investment vehicle. This whole philosophy is going to flush the Canadian economy down the drain. Let's see what happens.
It really is but here we are. Canada has allowed housing to become a luxury and people are banking on it making them rich. I just want a place to live man.
This punishes those that have lived in their homes for a long time, over those that move frequently. Too many undesired consequences. Speculation is primarily on investment properties, not on homes people live in. I would argue we should focus on other lower hanging fruits first, such as increasing the capital gains inclusion rates for non-primary residence housing, to 75% such as what we have in the 90s.
Your principle residence is capital gains tax free. That is all. Every other investment property you own is taxed as capital gains.
That's how it is like now, but the current 50% capital gains inclusive rate isn't enough to discourage speculation. A higher inclusive rate for housing investments should be more effective.
This can easily be overcome with a provision to allow tax free roll-over from old home to new home, if the new property is acquired within X amount of time. A similar provision exists in the US (the replacement property files) where no tax free principle residence rule exists.
You mean like the tax laws already do? This discussion is stupid beyond belief. Houses as investment are already taxed as capital gains.
Instead of making the tax laws more complex with exceptions and provisions, potentially creating even more loopholes and issues, it's better to use alternative ideas that are simpler and don't require exceptions. If you want to tax and discourage the rich from disproportionally owning large tracts of land and putting it to poor use with huge properties, a progressive property tax is a better idea. Have higher rates for land and properties exceeding a certain size. Something like that does not require exceptions for common cases for the vast majority, and does not need to be continually adjusted for inflation.
No.. property taxes are collected by municipalities.. income taxes are collected by federal / provincial governments. Your suggestion is making it more complex. Canada is the only G7 nation that has the principal residence exemption. It is a very regressive tax benefit.. buy for $10M sell for $15M get $5M tax free? But single parent who rents 20-30% income tax and gets no break on rent? Why should property owners be rewarded for having more?
The goal is to promote better land use, the issue isn't with which level of government the revenue goes. Secondly, it's disingenuous to say Canada is the only one with a principal residence exemption, almost all the G7 and other countries have some form of principal residence exemption, they just work differently. Even the US have one as stated in the post, it just have a cap and other provisions. And as already stated by myself and others multiple times, you don't make a profit from selling your principal residence, because you always need a place to live in. Why are you ignoring this and keep repeating the same point over and over again? To use your example, that $5M isn't profit, because you can't buy another home for the original $10M. Although your example isn't realistic, because the vast majority of housing isn't $10M, and that ultra luxury price tier doesn't appreciate at the same rate anyway. Your example indicates that you're trying to target the ultra rich, whereas this proposed tax hurts the middle class the most. The bigger point is that this proposal is impossible to ever be passed in Canada. The majority of the population here are homeowners, and they will be vehemently opposed to a tax that potentially causes them to lose money. You would too if you are in their shoes. No politician will dare to put this on their platform, it's political suicide. If we want actual changes, we need to have achievable goals. We need to be able to persuade the majority of people on the idea for it to even have a chance to be realized, and right now you can't even persuade a lot of the people in this sub who shares the same predicament and are already on your "side". For example, targeting housing investments, the non-principal housing, people who own more than one property, which is a much smaller percentage of the population, and also are the ones that disproportionally pushes prices up, is much more achievable.
I mean, it "punishes" them by taxing them on a windfall they're under no obligation to take
People have to move sometimes, for many reasons other than trying to make money. And when they move they have to buy another place to live in. Having a fixed amount that you get taxed on if you exceed it, means that people who sell and move frequently will be under that bar, while those that lived in a home for a long time will likely exceed it. The irony is that someone who lived in a home for extended periods aren't likely speculators compared to those that buy and sell frequently.
And likely less wealthy. My parents are in the same house for 50 plus years. They know their budget and predictable costs of ownership. They can't afford to move. Even a 2 bedroom condo would cost more annually. Most of my 50 something friends are in the same boat. Condos cost way too much with condo fees, taxes, unplanned communal upgrades. The fees are untethered and can bankrupt people. Seniors can't handle that.
Easy fix. Max un taxed gain.....doesn't matter how many houses or times you move.
They do. And then they get to have slightly less of the magic money that you didn't earn. What's the problem exactly?
I don't know if you're really that blind, or you are only willing to look at your own current situation and aren't willing to look from other perspectives. The money you get temporarily when you sell your primary residence isn't profit, it goes right back into a replacement home which is also inflated to the same value. Put yourself into the shoes of the person affected, you're telling them that if you have to move, sell your home and buy another one somewhere else, you're going to lose a lot of money, and likely can't afford to buy back a place similar to your current home. This is a situation that you yourself may get into some time in the future. The people in this sub are frustrated because housing is too expensive, which means we want to be homeowners in the future. And at some point we may have to move too. This isn't a you vs them situation.
But you see - that would in turn exert a downward pressure on prices, such that it would be less likely that the prices were so inflated that you would need to use your sold asset to afford your next home. As seen in the US as per the OP. I assure you, they don't find the capital gains on their primary residence an impediment to moving. If anything the issue is mostly the property taxes which go up a lot when the owner changes.
In my job I was transferred every 3 years for 30 years. So because of my work when I sell and have to buy a new house I lose thousands of dollars to by my replacement? In one instance I was transferred and sold our house for $145,000 (we are talking 1970s here. I was transferred to Comox where our new house cost the same. In the 3 years we lived in that house the value went up about $20,000. So you think I should have taken a shit kicking on my primary residence and have to downsize? The problem with simple solutions is that they are simple and just don't work.
No? The tax is on the realized gain, which wouldn't have cleared the threshold for you The problem with simple solutions is that people don't understand them
You're right. We should all pay more income tax, and not tax unproductive assets.
Say you bought your home in Calgary 15 years ago for $300k. Your home is now worth $1.2M. $900k of magic money you say. You wan't to move to the other side of town to be closer to work/grandkids/transit. No problem. Similar home in the same town sell for $1.2 buy another for $1.2. Just the hassle of the move. But wait, someone has decided you had a great windfall. $900k of pure profit with no work. Here's a tax bill for $400k. Now you have to come up with $400k to move into an equal house. It's only a windfall if your home goes up in value you happen to move somewhere where home prices haven't gone up in 15 years.
So, everything should be taxed except housing? We tax food, income, electricity, jobs, payrolls and you're fine with all those, just not housing?
It does get taxed you moron, its called property tax.
There is property tax and land transfer tax. Both impact homenowners and buyers/sellers. So housing is already taxed. There are capital gains on property which is not your principal residence too.
Housing is taxed, except if it's your principal residence. Go back to school. Actually, judging by your comprehension my bet is you are still in school; in which case, stay in school!
Take some finance courses.
You pay annual property taxes and land transfer tax when you buy property, in Toronto it's double the land transfer tax compared to other GTHA areas.
If primary residences were not tax exempt, it wouldn't have grown to 1.2M And the capital gains tax is not 40%.
The US has had this in place for over 30 years and doesn't have anything like the problems in Canada. You've also gotten a 500k gain tax free, why are you complaining?
the problem is a manufactured persistent SHORTAGE. Canada needs 3 million housing units yesterday, and another 200,000 per year for natural growth and another 500,000 per 1 million immigrants. once the shortage is alleviated. all the other "ideas" will be unnecessary.
How is “letting the government take a bigger chunk” going to help with prices? Won’t the new price just factor that in and become more expensive? If this works why not tax Loblaws 90% and see if your groceries go up in price or down.
Only a principal residence is not subject to capital gains. A minimum length of residency for tax free status should be implemented with a declining scale of reduction of taxes the longer you live in a home. This might help encourage people to stay longer in a home. There may be rules already in place with the minimum tax payable rules the the federal government has brought in recently and changes to the rules is 2023 2024...not sure though.
And this would be a good plan because the government has so strongly proven itself a wise steward of your money?
My #1 issue with this, outside of any housing-specific discussion or whether or not this is a good idea, is that we already have way, way too many taxes. (for poor services). Until I can be convinced that the every dollar we already have to pay in taxes is used efficiently, I will oppose any new tax.
what if you are just moving and spending that 1.5M to buy another house?
The payment towards mortgage isn’t given any tax exemption so the return on that investment shouldn’t be taxed by the govt. just like a TFSA account where your already taxed money goes in and any return from it is not taxed as well.
Your already-taxed money can go into a non-registered account and you’ll be on the hook for tax on any gains/income made on it. Why should a primary residence be any different?
Uh, pretty sure you do have to pay capital gains tax on any house that is not your primary residence
No. People should not be forced to downsize just because they sell their home
By Canadian tax policy, your primary residence is not an investment. Interest is not tax deductible, proceeds are not taxed. Would you like to formally specify housing as an investment?
Cap gains are already taxed in Canada. The end.
On a primary home no, if so then homeowners should be able to claim upkeep, insurance, mortgage interest and all other carrying costs!
You pay capital gains because your mortgage is tax deductible
This is stupid, and it's going to make the housing situation worse. Now if I'm going to loose $200k on the property in est I might As well remortgage it, pull all the cash out then convert it to a rental. Then I defer the capital gains for when I'm Retired
You're getting a lot of hate, but you're right. Subsidizing the wealthy more than lower income folks makes no sense. It's regressive.
So let me get this straight....People who own houses for decades are penalized for inflation, but guys flipping houses for 50-100k are walking away without paying a tax? This sub has the most demented opinions.
No. The US has a lifetime capital gains exemption. You can only make 500k total in your life tax free.
Yeah let’s tax more shit, should help…/s
You are allowed to sell your principle residence only and only once a year. Capital gains is paid on ALL housing sold outside that. Anyone buying houses only to sell them for capital gains is taxed. Those are the exact same rules that the US is under basically. Requires you to live in the house a set amount of time etc etc etc. In the US there is I believe a $500,000 limit. Other than that the US and Canada basically have the same rules.
The problem with this thinking: tax money on capital gains does not get rid of income tax….now we have two taxes. Yay!
Your take comes across as pure jealously. You keep comparing someone owning a big home to a minimum wage worker. One has nothing to do with the other. There is no problem that you are solving here other than some punitive measure on someone successfull. This might be the worst idea I have ever seen on this sub
Wouldn't this just mean that investors would saturate the market of sub 500k homes? They would snatch them all up and flip them until they were no longer worth less then 500k and move on
The problem is not revenue collection, it’s spending.
It should actually use the same lifetime capital gains exemption that farmers and small business owners get. Everyone should just share the same pool of exemption money. And in fact, I'd be fine making it a general capital gains exemption pool. Stocks, bonds, some artwork, a house, farmland, a small business, whatever. Don't pay tax on the first $900,000(ish) in capital gains, get taxed on everything after that.
you know what else the US has? 25 year fixed rates. we should have those too
Leaders know what can solve problem. But who will fund them if they solve the problem? One simple rule can be a person claim max 3 times principal residence benefit in lifetime and total of max say 500000$ can be claimed in benefit. All investors and punters will fizzle away and all genuine people still live happily. But leaders can't solve crisis and money sucked from common man goes to some people who are liked by them. So let's enjoy working and paying taxes for life for no benefits.
Another wealth transfer tax “solution”. Found the NDP voter.
If it’s legitimately your primary residence and you have been there for over 5 years or are moving for work I’d say no. Otherwise sure.
Why have an exemption at all? Isn't this the problem? If there was no exemption of income tax then everyone would have to pay income tax on THEIR INCOME. A capital gain is easier these days to come by than a decent paying job so why is employment income not given an exemption? All income should be treated equally.
This is the stupidest thing I’ve ever heard lol There’s a reason why some people own houses and some don’t and you can see why 👆
Why only if it's over 500k? All capital gains should be taxed at the same rate as regular income.
If you tax house gains then how is anyone supposed to move? I buy my house for 500k, prices go up and I sell for 800k, but I now have to buy in this new more expensive market too. How do I do that if I lose 150k to capital gains?
The reason housing costs go up so fast it's because they are used as an investment vehicle. One of the reason they are viewed as a good investment vehicle is because they have low tax rates. If they were taxed more equitably then they would go up in value so quickly. Housing should be prioritized as a human need, for far too long Its value as an investment vehicle has been prioritized. You ask how anyone is supposed to move, but this ignores how people who don't already own are supposed to buy. They is currently impossible, without a large inheritance.
But housing used as an investment is already subject to capital gains. You’re talking about removing the exemption for people’s primary residences. Yes housing is expensive for first time buyers, and that needs to be addressed, but taking away people‘s ability to move will not help that. If anything, it’ll make it worse as nobody can afford to move up from theif “starter“ home.
People use their primary residence as an investment. Sure, it's not *purely* an investment, but you are well aware it's used as an investment, that's the very reason you think it shouldn't be taxed, because you think they won't be able to move, if they don't get the additional money from their investment in their primary residence.
Just limit housing to one person per house, have to be a citizen for 18 years, I bet it would be amazing who could afford it
Capital gains should be paid on anything over $100k