Capital Gains Tax in Canada
There has been a lot of talk lately about rescinding the capital gains tax exemption on primary residents in Canada. However, there’s not a chance of that happening according to real estate lawyer Bob Aaron. He says that “the chances of that happening in our country are slim.”
This is not because it could be politically dangerous, but that it’s also because Canadians view this tax as their right. So what happen’s if the government did try to implement this? They might have to then try to make mortgage interest rates tax deductible, which is similar to what they do in the U.S.
Housing Market in Canada
Another thing to think about banks, they have sounded the alarm in the “runway” housing market that we are currently in. With real estate prices that are causing the banks to lobby policymakers to intervene. So even therefore the capital gains exemption on primary residents should be rescinded.
Bob Aaron believes that the we might be heading toward a recession, so that proposing the capital gains has sparked enough alarm. Now the Toronto Real Estate Board (TRREB) has even published an op-ed to express their feelings against the idea.
“Currently, the sale of a principal residence is exempt from capital gains tax. This makes sense for many reasons, not the least of which is the fact that homeownership is the cornerstone of retirement planning for many people. Unfortunately, while the federal government has denied any plans to change this policy, the idea continues to be discussed in various corners. This should stop.” – TRREB’s president and the boards CEO.
The Toronto Real Estate Board has also pointed out that the capital gains would change the rules and that first-time home buyers, who already feel as though they have greater challenges, would be penalized further.
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We will continue to monitor this developing story and report back when there is more to share. For now let’s concentrate on finding you your dream home!