The house tax

Remember how selling your home and keeping any profit was just a thing? No big deal. Part of living in gentle, trusting Canada.

Well, trust left in 2016. Since then you must apply for the Principal Residence Exemption and pass a little test in order to keep your house money, avoiding capital gains tax. The rules are not that simple, either. Accountants love it.

The excuse at the time: evil foreign owners are not paying their fair share of tax, so this is a way to ensure only citizens benefit from the tax-free status of home profits. Consequently every property changing hands has to be registered with the CRA, not just with local bodies.

But this pathetic, suspicious blog saw it through a different lens. If a future government wanted to start taxing house profits, it sputtered, what better tool for the government than a registry of all recent transactions with dates and purchase prices attached?

This brings us to Adam Vaughan. The former Toronto alderguy is now a Liberal MP and the housing & urban affairs advisor to Justin Trudeau, the prime minister currently (desperately) seeking re-election. Some months ago AV got his colleagues in the Ontario Liberal caucus to support a proposal to – guess what? – tax capital gains on residential real estate.

In recent days the federal Conservatives have been making some hay with this, but there’s been virtually no notice given by mainstream media – unlike Thursday’s big announcement regarding the shared-equity mortgage. Here is a letter the Tory leader has been sending out:

'More taxes for out-of-control spending'

Click to enlarge

The Vaughan proposal is simple: anyone selling a house within a year of buying it would have 50% of any appreciation taxed. After two years the capital gains inclusion would be 25%, then 15% after three years, reduced thereafter to 10% and finally 5% in year five. Given the fact the average Canadian moves every six years, this would net a huge number of households.

What does this mean? Recall that today there is no tax on profits of a property declared as a PR in any one year by one spouse. That could be a house, a cottage or a vacation place in Florida (among other things). To claim the PR exemption, you must fill out the appropriate schedule on your T1 tax form, detailing date of purchase, sale and buying/selling values. Cool. But under the Ontario Liberal Caucus plan half the profit in the first year or two (if a sale happened) would be taxable at [50% x your marginal rate].

Presumably that’s to punish flippers/speckers/renovators who buy and sell in a rising market and plump home values. But that may be unnecessary, since the CRA is already whacking people it thinks are ‘trading’ in real estate, taxing gains as business income. The real kicker here is in subsequent years, since dumping a property three years after you obtain it hardly qualifies as a flip. Lots of people upsize, move, divorce, split, have kids or need to change jobs/cities. Why should they pay more?

Silly question. It’s a tax. Liberals like taxes. So does Adam, who was a notorious lefty when ensconced in Toronto’s city hall. Without a doubt, residential real estate represents the last, massive pool of virtually untapped tax revenue in a nation of overspendy governments that cannot balance their books. How is this proposal to suck off unearned housing gains a surprise? Politicians have been doing this for decades from financial investors. Exempting the family home while nailing the family savings hardly seems equitable.

Anyway, there you go. Now you know why the 2016 change happened. And while Mr. Socks will surely say young Scheer is a neocon, Harperesque, fear-mongering barbarian for bringing it up, and that this is just dirty politics, it’s worth a discussion.

By the way, Adam has not returned my phone call. Let me know if there’s anything you wish to pass on, when he does.

166 comments ↓

#1 Message For Adam on 09.13.19 at 2:06 pm

It is about time that profits on home sales get taxed just like any other capital gains. Adam’s proposal is in fact very modest, 5 percent inclusion after 5 years. Our country has turned into a cesspool of speculative greed in the housing market, with many making huge tax-free profits in a the world’s largest housing bubble (as a country). This bubble is largely the doing of government, refusing to counter loose monetary policies, and this “socialism-for-the-rich” policy has disproportionately benefited the home-owning class. There is nothing productive about buying and selling real estate. At least when one buys stocks and bonds, one may thereby be funding productive efforts. In short, taxing profits on selling real estate, whether or not primary residence, is long overdue, and Adam’s proposal is a modest start.

#2 Polozified on 09.13.19 at 2:06 pm

Adam Vaughan obviously needs a new pair of kicks or another set of really annoying neon jeans.

#3 Sold Out on 09.13.19 at 2:07 pm

Well, it wasn’t all that long ago that there was a lifetime capital gains limit, above which everyone was taxed according to their income bracket. I have no problem with re-instating such a tax. It might even encourage people to invest in a more diversified manner, which should make you happy, Garth.

#4 Reddy on 09.13.19 at 2:13 pm

Thats so dirty… I cant see that ever working…

#5 Reddy on 09.13.19 at 2:14 pm

Does anyone know if andrew sheer has made mention of marijuana? My mj stocks need a boost…

#6 Popeye The Sailor Man on 09.13.19 at 2:21 pm

What about if you take a loss, would the family home generate a capital loss. This could be the worst time for the Government to implement this, it could increase the deficit in the short term.

If they did implement this a newer home owner should go out and find the highest estimate for there house to set the baseline immediately and keep every single little receipt that could be placed against the house. Paint, fence, carpet, filters, light bulbs, maybe even heating and insurance because the house will asset needs to be protected. Maybe you can write off the interest since they are treating it like an investment.

A 10% drop in housing in Vancouver could generate a huge capital loss in the near term, that would be carried forward for some time.

I don’t think they have thought this through.

#7 Flipper Hunter on 09.13.19 at 2:37 pm

This is not a bad idea in principle . I just disagree with 5% after 5 years and the fact that this can be enacted on federal level. If this is truly about punishing flippers then the last tax after 5 years should not be there. Also this shouldn’t apply to residences outside of major cities like Toronto and Vancouver where speculation is not the problem. Otherwise a great idea, which should be implemented by local municipal government and not federal government. I don’t think they will enact this on federal level, there will be too much opposition to it.
Good idea though. If you are not confident about where your finances will be in 5 years then just rent and invest like this blog suggests. Homeownership is not for people who live from cheque to cheque, especially in large cities.

#8 Ponzius Pilatus on 09.13.19 at 2:38 pm

Scheerer would give me a 25% tax credit on my transit pass, in exchange for my vote.
Well, the pass costs only 53$ a month.
So, not enough to bribe me.
But I’m open to other offers.
Crazy thing called democracy.

#9 RL on 09.13.19 at 2:44 pm

About half the shows on cable tv seem to be about people ‘flipping’ houses for profit. Clearly a business endeavor – what’s happening to those profits today? Having the CRA investigate people who are trying to duck their tax obligations sounds expensive – this actually seems like a more straightforward solution? Though five years is too long as you point out (maybe 2?) and 50% in year 1 seems high. Though I guess the entire argument is predicated on speculators driving up house prices and I wonder how much data there is to support that being the main cause?

#10 Ponzius Pilatus on 09.13.19 at 2:44 pm

Preventing people from moving too often would be beneficial for society, me thinks.
More stable families, safer neighborhoods etc.
So, this one gets my vote.

#11 Indigirl on 09.13.19 at 2:51 pm

Speaking of too many taxes, one I rarely hear about is the tax on WIP – work done by professionals (accountants, lawyers, probably others), not yet billed and obviously, not yet paid. Why on earth is WIP being taxed and why do we never hear about it. This dramatically changes the ability of firms to carry clients in litigation, for example.

#12 Cowtown on 09.13.19 at 3:01 pm

So on one hand, we want to encourage people to move where their are jobs, an example is here in Calgary where so many people have been laid off that they need to move to find employment to support their families. The alternative is to go on unemployment, perhaps lose their homes etc.
This type of tax sounds great on the surface but it absolutely would be a huge disincentive to anyone looking to move for employment.

#13 Sylar on 09.13.19 at 3:08 pm

Wow can’t believe how many people are missing the point.

Read the article more carefully. Use your eyes. CRA ALREADY wacks you for spec’ing. Adam’s proposal is ANOTHER layer of tax on top of that. And 5% in 5 years IS NOT speculation.

If you live in BC, it’s kinda like how the “School Tax” has nothing to do with schools at all.

Liberals want to make you poor, and thereby equalize society at large. There are little incentives left for anyone to work hard as the rewards go back to the reigning government in charge.

#14 Sylar on 09.13.19 at 3:11 pm

“Preventing people from moving too often would be beneficial for society, me thinks.”

Uh huh. Great logic Ponzius. Labour mobility is core to economic sustainment. Artificial barriers to mobility is itself an economic rent. Eco rents are bad.

I suspect you’re in the camp of “Trump’s Space Force is needed to fight The Cloud”.

#15 Mike on 09.13.19 at 3:13 pm

The comments around this topic are absolutely nauseating. At what point should government be reigned in and made to BUDGET!? Since when are the citizens a milk cow to endlessly feed the non stop waste, grift and lavish pensions of MP’s?

The fact that some of you expect that the “house owning class” should be somehow punished for being prudent savers and investors is why only 60% of working age people in this country actually contribute to public coffers.

At some point that 60% will have had enough and a Hong Kong/Yellow Jacket protest won’t be far off the horizon at that point. What will government do then?

#16 entropy on 09.13.19 at 3:13 pm

Adam Vaughan is … ugh. Ill be nice….
what a real piece of work.

#17 Lee on 09.13.19 at 3:17 pm

I heard about a year ago they were planning this and I think I posted sbout it (probably after hearing about it here). Houses are truly where governments will stick it to people in the future.

#18 Guy in Calgary on 09.13.19 at 3:22 pm

So basically a DSC on houses.

#19 Single mom on 09.13.19 at 3:23 pm

Off topic, but whatever happened to providing government services? Try to call the Canada government services 1 800 387-1193 to find out why I am not receiving my child tax benefits and there is a 40 minute wait (hold).
Last week the wait was 30 minutes.
I guess we parents have nothing better to do than wait…

#20 Tommydouglas on 09.13.19 at 3:23 pm

Actually accountants hate it. Along with the tax on split income changes.

#21 Josh in Calgary on 09.13.19 at 3:28 pm

Of course unlike equities there are carrying costs with housing. Maintenance, mortgage interest, insurance, taxes. Do they let you deduct those from your “profit”. Heaven forbid you do any upgrades. Do we have to keep receipts from those now to show the difference between appreciation and improvements?

Like most of these hair brained ideas it sounds good in theory, but in reality it just creates busy work for bureaucrats and accountants.

#22 conan on 09.13.19 at 3:33 pm

If rates fall like the Orange One wants, then house prices will surely go through another round of unbridled growth. Lots of people will be sitting on free money, made with zero effort. That’s perfect to tax.

I see nothing wrong with this.

#23 Penny Henny on 09.13.19 at 3:34 pm

Some months ago AV got his colleagues in the Ontario Liberal caucus to support a proposal to – guess what? – tax capital gains on residential real estate.-GT

/////////////////////

Ontario Liberal Caucus, you mean like K. Wynne

Of course not. – Garth

#24 SCD on 09.13.19 at 3:34 pm

I would really like to get to a place where taxes were kept to a minimum, were used for necessary gov’t operations and stopped being used to manipulate our behaviors…and when did profit become such a bad word? Every time you get paid at work it is profit. Too much politics of envy.

#25 Smoking Man on 09.13.19 at 3:41 pm

Commies..So glad I split…

At least in USA you can write off you mortgages

T2 and his globalist handlers want everything you own.

#26 earthboundmisfit on 09.13.19 at 3:42 pm

Snake …. and always has been.

#27 Miss Understanding on 09.13.19 at 3:47 pm

I see ETFs trading here: Aequitas NEO-L,CA. Is this safe?

#28 Like in USA on 09.13.19 at 3:49 pm

We should have a similar tax rule as in the USA. There, the gain from the sale of your home is taxable income, but you can exclude up to $250,000 ($500,000 in case of married couples) assuming owned the home for at least two years and have lived in it as your primary residence for at least two years in a five-year period.

#29 G on 09.13.19 at 3:53 pm

Thank you Garth for letting us know!

It seems, if you want to own a home, first you pay the annual property tax, insurance on the house, interest on the bank loan and principle, then at the end some Political people/Party seem to want to tax you even more, take more money from your family.

If the house is worth less I’d guess they won’t be a capital lose option on your tax form.

Government sure like spending other people money! Not just what they take in now, but borrow even more against being able to tax you more in the future.

re: “but there’s been virtually no notice given by mainstream media”

The Mainstream corporate media owners that pay the salaries, try controlling what information is given out to the masses.
It’s not to tell you what you really need to know.

I’d guess when the wise people in the corporate media
figure it out and can afford to leave they do.

mainstream media is like non-news, almost like that fake news that is feed to the masses much of the time. I try to stop listening to them most of the time now. It’s simply much easier now.

But worse, the companies like FB are censor free speech and manipulate what you get to hear personally through them, so it’s getting harder to find out what you really need to know before voting.

#30 lieberals on 09.13.19 at 3:58 pm

The lieberals

#31 leebow on 09.13.19 at 4:04 pm

Are they going to include a corresponding provision for the mortgage interest and the potential capital loss?

#32 Remembrancer on 09.13.19 at 4:05 pm

#9 Ponzius Pilatus on 09.13.19 at 2:44 pm
Preventing people from moving too often would be beneficial for society, me thinks.
More stable families, safer neighborhoods etc.
So, this one gets my vote.
—————
Huh? How exactly is the state economically restricting freedom of movement beneficial again? On the flip side, this is not really restricted movement, simply confiscation of 50% of profits on appreciating RE if you do move. Doesn’t make me feel better though…

Actually not the wackiest thing Adam Vaughn has come up with, unfortunately, we can thank the witch’s brew caldron of Toronto City Council, though its usually NDP’ers bubbling up…

Now, to really go down the rabbit hole, how does this work with the 10% home buyers plan? Would 50% of the feds capital gains be taxed by the feds in the 1st year if there was a sale with gains?

#33 Remembrancer on 09.13.19 at 4:08 pm

#28 G on 09.13.19 at 3:53 pm
Thank you Garth for letting us know!

It seems, if you want to own a home, first you pay the annual property tax, insurance on the house, interest on the bank loan and principle, then at the end some Political people/Party seem to want to tax you even more, take more money from your family.
———————————-
Missed one, actually you first pay land transfer tax, doublely if you’re buying in the center of the universe, er City of Toronto…

#34 Marquis on 09.13.19 at 4:08 pm

If a capital gains tax, then also a corresponding and proportionate deduction for capital improvements, mortgage interest, etc. incurred in the creation of the capital gain.

#35 clayton604 on 09.13.19 at 4:09 pm

Garth.. lets calm down already.. whatever happened to lets not over-react or exaggerate because of fear.

The requirement to report capital gain was always there on schedule 3 of your T1. However, many many people abused the PR exemption so the government created a standard form/schedule and required taxpayers to claim it. Remember its an permissive exemption.. that you must elect/claim.. the CRA was just really lax on people who flipped houses before housing became a hot button political issue.

Secondly.. there is a very easy solution for anyone who moves/marries/divorces etc etc.. that is to provide a rollover of the ACB to the new property.. a substitute property rule.. just like they have in the US that allows the gain to be deferred if a newer property of the same or higher value is purchased within 2 years. Seems simple enough to accommodate all people who need to move frequently through no fault/cause of their own.

Lastly we should ask ourselves as a society if there really should be an exemption for gains on a persons principal residence? What is the public policy purpose for this exemption. Should there be an upper limit on the amount of the gain that is tax free?

#36 Dave on 09.13.19 at 4:10 pm

Where does ndp sit on Housing?

#37 Remembrancer on 09.13.19 at 4:11 pm

#27 Like in USA on 09.13.19 at 3:49 pm
We should have a similar tax rule as in the USA. There, the gain from the sale of your home is taxable income, but you can exclude up to $250,000 ($500,000 in case of married couples) assuming owned the home for at least two years and have lived in it as your primary residence for at least two years in a five-year period.
————————————
except its not the same, in US, unlike Canada, mortgage interest is deductible…

#38 Waldguy on 09.13.19 at 4:19 pm

What’s with the comments agreeing with more taxes on the place you call home!?? CG taxes are basically a huge tax on inflation. Even a 5% tax would wipe out a pile of equity on a mortgaged house.

Liberals need to focus on spending less rather than getting more. Paul Martin where are you?

#39 JSS on 09.13.19 at 4:22 pm

The capital gains tax on principal residences was going to happen – either today or tomorrow.

Taxes (including rising ones) are the price to pay for living in the best country in the world!

#40 n1tro on 09.13.19 at 4:24 pm

#9 Ponzius Pilatus on 09.13.19 at 2:44 pm
Preventing people from moving too often would be beneficial for society, me thinks.
More stable families, safer neighborhoods etc.
So, this one gets my vote.
———–
You’re an idiot. I’d give you a pass if you would have said preventing people from “flipping” houses would beneficial for society.

Imagine if I bought a place and was your neighbor. Why should I get punished twice for wanting to leave asap!?

#41 James on 09.13.19 at 4:25 pm

#24 Smoking Man on 09.13.19 at 3:41 pm

Commies..So glad I split…

At least in USA you can write off you mortgages

T2 and his globalist handlers want everything you own.
________________________________________
Like you own a home Old Man?
Wait until you see your local tax bill for your property their (in SoCal) Old Man. Makes us look like we are stealing away from the bank!

#42 Mattl on 09.13.19 at 4:34 pm

#21 conan on 09.13.19 at 3:33 pm
If rates fall like the Orange One wants, then house prices will surely go through another round of unbridled growth. Lots of people will be sitting on free money, made with zero effort. That’s perfect to tax.

I see nothing wrong with this.

—————————————————————-

No effort? I see doomer posts all the time that talk about how much of a PITA it is to keep and maintain a home.

If homes are a no effort cash cow that keeps on giving, should I assume you own a whole bunch of them? I mean why isn’t everyone in on the gig?

#43 BamBam on 09.13.19 at 4:37 pm

I’ve been waiting for this… or some derivation for years. I’m not up for taxation, it’s incredibly high in many respects, but the rules for taxation on various assets is incredibly disjointed.

Governments are currently TELLING people what to spend money on. They are deciding what we have to do with our money by penalizing/incentivizing particular asset classes.

They, themselves, have decreed that housing is a worthy investment, thus it’s tax free, while competing investments (non-housing cap gains, dividends, interest) is all thoroughly taxed. And, in any given year, the only debate is how much more these particular non-housing investments should be taxes… on whether there should be inclusion of all asset classes.

Not taxing homes is an overwhelming reason for the bubble. Whether residents live there for months, years, or decades, the result seems to be capital gains appreciation that can be likened to a business anyways. Why not level the playing field.

I for one am tired of having my investments heavily taxed on risky investments while the government credits my next door neighbor for the simple and nonsensical act of simply signing up for home ownership.

Introduce effective house cap gains tax, or lower the taxes on competing investments… but please stop punishing investors for not selecting the governments “approved investment” list.

#44 SharkTank on 09.13.19 at 4:38 pm

Mr Socks can win an election purely on saying he will tax capital gains with a massive majority. Even a short trip over to reddits Canadian and CanadianPersonalFinance forums will prove it to you.

That’s his voter bloc, ignorant, and resentful, on the left. Trumps’ bloc is the same, on the right.

#45 rrsp man on 09.13.19 at 4:38 pm

Silly question – but if you sell your house, and within the same year (using the proceeds from the sale) I place the SAME amount that I would have to pay capital gains – into my RRSP – would that negate it? If im cashed up, I can just wipe out this tax just by placing this same amount into my RRSP – no?

#46 PastThePeak on 09.13.19 at 4:43 pm

It is highly likely such a tax does come into place within the next 10 years.
– Leftist parties gather about 60+% of the votes every election. They will govern more often.
– Spending is continuing to ramp up, and permanent deficit is the norm.
– Housing (principle residence) represents one of the last untapped areas for the government commissars.

They will sell it by making the introduction of it only on profits over XX amount (only the ‘rich’ pay…). But once implemented, lowering the threshold is easy as most Canadians never follow the budget news.

They will sell it to the younger generation who are angry / bitter and want revenge on those Boomer bastards. They haven’t lived long enough to know that once a new tax is implemented…it never goes away…

#47 Green Party Surfboard on 09.13.19 at 4:46 pm

Profit should always be taxed, including the proceeds of crime.

#48 MF on 09.13.19 at 4:52 pm

#4 Reddy on 09.13.19 at 2:14 pm

Nothing. But whoever does the right thing and makes it illegal again has my vote (serious).

MF

#49 Stan Brooks on 09.13.19 at 4:53 pm

Yes!

Tax the sheeple to death.

2 land transfer taxes, CHMC ‘insurance’, taxes to pay for shared equity programs for first time home buyers, house speculation tax, empty house taxes, carbon tax, liberal hand out taxes, now capital gain taxes on houses (it was waaaaaaaaaay overdue), soon to come prohibitive taxes on RRSP withdrawals, inflation hidden taxes including imaginary capital ‘gains’ on everything due to melting currency, the list will only keep expanding.

Absolutely fantastic news.
I will suggest a few more taxes when making my campaign contributions to the sock’s boy/the best thing that ever happened to this place.

Total tax cost for this sheeple is probably one of the highest in the world. It is well deserved. It should pay more. That’s what rich people do.

Cheers,

#50 The WOMBAT on 09.13.19 at 5:03 pm

Oh great. Another waste of time election.
No matter which party wins, the government gets back in.

#51 T on 09.13.19 at 5:12 pm

If this proposal was limited to 3 years with no taxes beyond that, I think it’s a winner. Too many people game the system in various ways.

#52 T on 09.13.19 at 5:15 pm

#4 Reddy on 09.13.19 at 2:14 pm
Does anyone know if andrew sheer has made mention of marijuana? My mj stocks need a boost…

—–

Give your head a shake. This whole marijuana legalization experiment has been a disaster. I see and smell too many people smoking it everywhere; sidewalks, parks, even while driving in their vehicles.

#53 FreeBird on 09.13.19 at 5:23 pm

Lots of people upsize, move, divorce, split, have kids or need to change jobs/cities. Why should they pay more?
——————-
I sound like a broken record but another common reason is unexpected illness, yourself or a family member. Should this be punished? Seems like too wide a net.
———————
“If voting made a difference, they wouldn’t let us do it.“
Mark Twain

#54 yvr_lurker on 09.13.19 at 5:28 pm

I think that this is nothing other than a fear-mongering tactic thrown out by the conservatives to make Trudeau look bad. Trudeau and Morneau largely backed down on the capital gains, bogus corporate entities, etc.. changes that they were trying to implement 15 months ago due to the outcry of many, including members in their caucus. There is no way that they would try to implement this rather more radical proposal of putting a capital gains tax on housing; just like with the capital gains issue they would have an outcry from many of their own members.
There would be a backlash to demand (like in the US) that interest on mortgages be a tax write-off.

As garth has said in the past with other issues, I think that this one is a nothing-burger….it is only convenient to bring this up now as the election nears….. no need for everyone to get their nickers in a twist over this one….

#55 Democracy Is Mob Rule on 09.13.19 at 5:34 pm

The Romans started a tax on owning slaves. Citizens freed their slaves to avoid the tax. The Romans then implemented a tax on freeing your slave.

#56 Mean Gene on 09.13.19 at 5:43 pm

I generally don’t like Mr Scheer but he does make some good points in his letter.

A lot of Canadians do take a one asset strategy when investing and there is too much humping of real estate, they should be encouraged to diversify their investments a bit more, maybe taxing capital gains on the principal residence is overdue… taxing the difference between inflation and the gain would be more reasonable.

#57 Axehead on 09.13.19 at 5:51 pm

The last sentance in that letter has grammer error.

#58 FreeBird on 09.13.19 at 5:52 pm

BTW, if a property owner loses money on a sale in first year etc is a tax credit given? If houses/real estate is being taxed essentially as a business gain/loss then like all business owners the ability to create a carry forward gain or loss should be allowed. All’s fair right?

#59 Mandria on 09.13.19 at 5:55 pm

To all the people that want government out of the housing market…I totally agree with you! Let’s disband CMHC, any “First Time” rebates, and stop allowing favourable RRSP withdrawals for home purchases.

We don’t need a stick, we can simply remove the carrots.

* That being said I do think that public or non-profit sector would need to provide some low-cost rentals for low income seniors etc. to ensure that the vulnerable retain basic dignity.

#60 Contentin306 on 09.13.19 at 6:05 pm

I’d like to see less of these one size fits all solutions to a housing problem that is regional. Don’t apply these measures to “cool” the market or “make it affordable”

Saskatoon’s market has been relatively affordable, even in the peak of the oil boom here around 2013-4. Sure, we were overvalued and overbuilt a little. We’ve corrected some already.

TLDR; We don’t need these spec taxes out here.

#61 Asterix1 on 09.13.19 at 6:18 pm

“….residential real estate represents the last, massive pool of virtually untapped tax revenue”.

What about the Land Transfer Tax! These tax sucking vampires have already gotten their fangs in us. More to come I guess.

Can’t see many people making any money on residential real estate, it’s been going down for a while. Nothing will pump this up in the next few years.

#62 rookie57 on 09.13.19 at 6:26 pm

Real Estate is already taxed. Every year you pay a municipal tax on your property. Unfortunately, a lot of money resides in RE and it is a stationary target. The government sees a revenue stream from the perceived RE wealth. I see more and more intrusion by government taxation as government debts require payment. I don’t know where the tipping point is in Canada- 60, 70, 80 percent taxation? Ugh.

#63 Lost...but not leased on 09.13.19 at 6:31 pm

Another Tax Grab….so if and when they create a house tax….they will dedicate the new revenue stream towards…drummmm rolll….____________________

That’s what I thought…

Next up? Inheritance tax.

#64 Barb on 09.13.19 at 6:33 pm

Oh my gawd, Adam et al.

The ages of some commenters are pretty obvious…if they support the PR tax on capital gains, they’re Mills full of envy at those of us who held onto homes for 40+ years and, yes, we made money!

Canadian Liberals, what a scourge.

Wonder if T2 is paying lots of taxes on his family’s owned petrol stations…probably has all that in offshore accounts taught him by Daddy.

#65 Cottingham a bargain on 09.13.19 at 6:40 pm

As a purveyor of financial products that are taxed as they appreciate , I would have thought that you would almost welcome a tax on what appears to be an asset that causes so much angst and resentment on this blog in so many ways.

As a “ house bumper” myself as much as I don’t want to see it implemented , I can’t see it as too unfair

#66 AGuyInVancouver on 09.13.19 at 6:40 pm

So lemme get this straight Garth…after years of telling your readers that they should diversify their assets and put more into equities/ETFs etc you are now outrgaed that real estate might be taxed the same way capital gains on investements are? That’s weird.

What outrage? I just confirmed what I told you three years ago. – Garth

#67 Alessio on 09.13.19 at 6:49 pm

It’s about time. Homes have become investments so they should be taxed just like stocks and market funds.

#68 Newcomer on 09.13.19 at 6:53 pm

Why the 50% pass in the first year? I would say 100% taxable at marginal rate at all times, but whatever portion of that cap gain that goes to the purchase of a new house is deductible. That would solve the problem of preventing people from selling and repurchasing for legitimate reasons, without giving an unfair break to just one type of cap gain. Either that or make TSFAs unlimited like houses.

#69 BlogDog123 on 09.13.19 at 6:57 pm

My local lieberal candidate sent his re election flyer to our house… you have to look hard to find out he is from the liberal party of Canada.. small logo, not a mention of Justin Mr. Socks or even a picture of the local guy near the PM. That flyer speaks volumes about how much of a liability the drama teacher is…

#70 Nonplused on 09.13.19 at 7:00 pm

So what happens if the house goes down in price? Can you deduct a capital loss?

Anyway taxing capital gains on principle residences to me seems as criminal as a “wealth tax” (which we already have in the form of property taxes). The problem with taxing capital gains on a primary residence is that there really isn’t usually a gain there. It’s all house price inflation. You still only have a house. If you need/want to re-enter the real estate market you need that apparent equity, because the other houses have all gone up too. Not to mention that you have to pay the realtors, and they in turn have to pay income tax on those commissions. And in some areas you have to pay outrageous land transfer taxes.

And leave it to the government to impose all this extra paper work right when the market doesn’t look like it’s going to go up anytime soon. Who says they don’t ring a bell at the top?

I can see capital gains taxes on flippers, often they renovate and sell so it is in fact a business. Maybe on stocks too because the companies grow in value as they increase revenue. But a person’s primary residence? How is that a business? And let’s not forget the owner had to use all after tax money to pay for the thing, So Justin already has his cut of the long hours you spend working every month to pay the mortgage.

If they are going to start taxing so-called appreciation of a certain household expense, it stands to reason we should also be able to write off depreciation of other household expenses, like cars, RV’s, boats, and electronics. I’ve got about $100,000 worth of write-offs sitting right there in the stuff I currently own. A fully tricked out iPhone 11 costs over $1000, and it’ll be worth nada in 4 years, so a family of 4 could write-off $1000 a year just on phones. But I have a feeling Justin isn’t going to see it that way. When the family car goes from $40,000 to $4,000 in 7 years I imagine you are on your own with that one, even if the primary use of the car is getting to work so you can pay for the house!

And mark my words, if Turdeau gets away with this there will be “creep”. This is only the first phase. Eventually all capital gains on primary residences regardless of duration will be included. That’s the way it was done with income taxes too. First, introduce it in a way that only a small percentage of population, the rich let’s say, actually end up paying. Then slowly increase who is included a bit at a time. Eventually everyone, even those on minimum wage, will be paying something, which they now do.

I wonder if these people will ever realize that there isn’t anything left to tax. Nobody has any money! Any new taxes will just be offset by reduced collections from other parts of the economy. That’s the way it has to work if we assume there are a limited amount of dollars in circulation. Sure, the number of credits and debits outstanding in the financial system far exceeds the amount of currency available, but that number is still finite. So every dollar you take away from Joe-Sixpack in new taxes will just be one less dollar he would have otherwise spent at Home Depot, which they were already taxing.

—————————

The economy can be thought of without using money as an intermediary, although money sure helps facilitate financial transactions across multiple commodities. But let’s look at it briefly without money.

The economy is an energy dispersion mechanism. Energy, particularly human energy, is dispersed to produce goods and services. There is a multiplier effect when other forms of energy like fossil fuels are entered into the mix which multiply the number of goods and services an hour of human labor can produce, but ultimately human labor is the driving force behind all economic activity. Other multipliers include automation, but ultimately human labor builds those multipliers too. And digs up the fossil fuels that keep them running.

So taxes, really, can be thought of as compelled labor without pay. If your marginal tax rate is 50%, it means that for every extra hour you put in, you are working 1/2 an hour for the government for free (or in exchange for roads and other government services). It is your time they are taking away from you. Remember, money isn’t real, it’s just accounting slips and entries in a computer. It is an exchange mechanism by which you can trade your labor for various diverse products produced by other people’s labor.

Now some enterprises end up concentrating vast sums of wealth in capital and intellectual property. The people who end up owning these assets did not construct them entirely themselves, but instead have craftily paid workers less than the machines or intellectual property they created somewhat less than the market value of the resulting products. But the take here by the so-called capitalists is a fraction of what the government takes. A GM union worker might be seeing 20% of his labor going into plant, equipment, research and development, and shareholder profits. But the government take on the operations is twice that. I suppose many people would think that that is fair if what we are getting from the government in return is roads, hospitals, schools, etc. which we do. But we also get a lot of things we could live without. The government is good at only one thing, and that is wasting labor on things that don’t need to be done. Parliament itself is a great example of this. Is there really a need for any more laws? I think we have enough laws.

#71 Damifino on 09.13.19 at 7:07 pm

Where is “A Dollar is a Dollar is a Dollar” when you need him? I expect him to chime in at any moment with a streak of misguided cheer leading.

On a similar note, the PM has reminded us time and time again “A Canadian is a Canadian is a Canadian”… and yet he’s just singled out the citizens of Toronto, Vancouver and Victoria for greatly increased maximums in the hair brained Liberal ‘home buyer plan’.

Oh, the hypocrisy!

#72 Westcdn on 09.13.19 at 7:09 pm

I think taxing capital gains on principal residences at this stage of the game is dangerous. For better or worse, the decision to exempt principal residences from taxation was a decision made without knowing the many who game the system. Why should a home be treated as a business? I know my house is facing higher property taxes and upkeep repair expenses never mind a lower value. It is the gamers that need be removed.

I miss my previous neighbor. He and I could bullshit without hurt feelings. One thing he said was with any life event you live or die. Of course I countered that living wounded is a common condition and that is not fun. Just the same, I don’t want more whining about how life is unfair – it is. I get tired of people seeking the easy way out or justifying their high status. I do not like commiserating. We didn’t take ourselves serious although we got there are times when you do.
So when I die, I don’t want people to care because I certainly won’t.

My daughter texted a story that made me laugh about her so to be 4 year old daughter who likes her US male cousins – they were travelling stateside.
Daughter: “your cousins are arriving at the airport”
Savannah: “are we going to meet them”
Daughter: “umm, no”
Savannah: “is us going to meet them”

When I married, we were 2 as a family. Two children we were 4. They had 2 each and the family was 8. Small wonder Ponzi scheme pension plans worked. Now that Canadian birth rates are falling, expect pension promises to fail for many more recent born.

#73 Bob Dog on 09.13.19 at 7:18 pm

Houses are no longer homes for Canadian families to raise their children in. Thanks to the appalling incompetence of the ass clowns trying to run our government, A Canadian house is a commodity to be traded on a global market like Shopify shares or bitcoins. Why shouldn’t profits be taxed.

The real question is why do Canadians under the age of 35 even bother showing up at work or paying rent. It’s long past time for a general strike. Young Canadian families have been absolutely sodomized by liberal, conservative and socialist governments from coast to coast for the last 20 years.

#74 Zen on 09.13.19 at 7:20 pm

#23 SCD
I would really like to get to a place where taxes were kept to a minimum, were used for necessary gov’t operations and stopped being used to manipulate our behaviors…and when did profit become such a bad word? Every time you get paid at work it is profit. Too much politics of envy.
———————–

Try Hong Kong. 15% top margin tax rate and NO capital gain tax if you can handle the high living cost and protest. Guess every city/country has its own problems.

#75 tccontrarian on 09.13.19 at 7:26 pm

The Liberals are onto something, I think. They’ve discovered that a nation can tax its way to prosperity!

They’ve done exhaustive research on the record of other Nations that have tried similar policies and came up with:

” We can do better – we are… Canadian!”

God Help us!

tcc

#76 Borden Renter on 09.13.19 at 7:26 pm

Adam Vaughan and his ilk are pure cancer, politically speaking. While they may be your typical garden-variety ‘do as I say not as I do’, ‘let’s tax everything’ “liberals”. They come from the urban core of, arguably, the worst city in the country, which makes their policies that much more difficult to stomach for me. I’m just a rural white guy with a bunch of guns, and all I want is to be left alone by the government I serve, apparently that’s too much to ask for.

We’ve become real estate obsessed in this country. The reason you aren’t hearing about this much in the mainstream media, is that that Trudeau’s (and Katie Telford’s?) friends who run the joint know full well that this would be the dagger in the heart of their campaign. People may not care about the SNC scandal, or ever creeping taxes and the cost of living, but go after their sole investment strategy? Look out!

October can’t come soon enough, and I sincerely hope enough Canadians come to their senses and vote these amateur fools out. I’ve served my country for 18 years and love it dearly, and I don’t believe I can stomach another 4 under Trudeau 2.0. It would be time to country shop at that point… or just shrug off society and live in the woods.

Fingers crossed!

#77 Sickening tax! on 09.13.19 at 7:28 pm

You save to purchase a house so the money earned is taxed. You pay tax to live in that house. You pay stupid amounts to a houses closing costs, realestae services are taxed, and the double land transfer taxes in Toronto.
You risk the hope of interest rates don’t rise while you live in that house or you don’t fall victim to job loss. Regardless of one’s situation I’m totally opposed to
taxing principle residency. I.M.O opinion it’s corruption and manipulation. I guess they figure once they’ve got your foot in the cement we’ll just be going round and round in circles casing our tails. Disgraceful.

#78 baloney Sandwitch on 09.13.19 at 7:40 pm

I think its a good idea with some modifications. Just make it a plain vanilla capital gains, instead of a fixed percentage. I think the cut-off should be three years. If you sell within 3 years then pay capital gains (if you have a gain, or you can take a cap loss). After 3 years no tax or deduction.

#79 Linda on 09.13.19 at 7:46 pm

If the Liberals do tax primary residences we should be permitted to do as in the USA & deduct the mortgage interest off our taxes.

Also if one party is discussing this idea then the other parties are too. Lest we forget, there was a promise that income trusts would be left ‘as is’ yet the PC’s changed the rules (once elected) despite promising just that.

#80 Raging Ranter on 09.13.19 at 7:50 pm

#53 yvr_lurker, you mean fear mongering like Trudeau trying to make this election about abortion? We’ve got a better chance of seeing capital gains taxes on houses than we do restrictions on abortion. Who is dear mongering again?

#81 Oakville Sucks on 09.13.19 at 7:53 pm

Andrew Sheer just lost my vote to Trudeau!

This policy is long overdue. Foreign Ownership Tax should also be increased to 50% AT LEAST to keep up with countries like New Zealand, France and the likes!

#82 akashic record on 09.13.19 at 7:53 pm

Globalism in North-America managed to create such a great middle-class within a few decades, that they turned into poor, “socialist”-voting crowd, living from paycheck to paycheck.

The best part is that this whole globalism thing was supposed to convert Communist China into democracy.
That turned out to be an other greet success, too.

#83 Oakville Sucks on 09.13.19 at 7:54 pm

#72 Bob Dog on 09.13.19 at 7:18 pm

**********************

AMEN BROTHER!

#84 Debtslavecreator on 09.13.19 at 7:59 pm

The biggest factor in creating unaffordable housing is the bank of Canada’s junk monetary policy along with CMHC/ government subsidies – these 2 corrupt crown corporations are responsible for about 90% our our woes
Applying a very real tax to imaginary nominal gains created as a result of artificially cheap credit is outright theft
Sick and tired of the radicals and other Bolsheviks among us
No amount of tax revenue will help
The last thing this nation needs is another tax to feed the out of control monster voters and borrowers CHOSE to create
The leading house tax proposal on the shelf is a lifetime capital gain exemption – probably starting at 500k and likely only applicable on homes sold for well over 1M
Within 5 years you can expect the tax free amount to come down to maybe 100 k. Your groceries will easily be triple and salaries not much moved
Adam Vaughan replied to some critics on his twitter feed on this proposal claiming he does not support it and that it’s not a policy proposal … yeah right me Adam Marc

Government IS the PROBLEM

#85 Yuus bin Haad on 09.13.19 at 8:19 pm

I had to laugh – in an old poli-sci textbook I found, someone had written “Adam Lives Here” in the upper left-hand corner of the political spectrum diagram.

#86 oh bouy on 09.13.19 at 8:27 pm

@#49 The WOMBAT on 09.13.19 at 5:03 pm
Oh great. Another waste of time election.
No matter which party wins, the government gets back in.
________________________________________

twas ever thus.

#87 Ignorance Is Bliss on 09.13.19 at 8:32 pm

I can’t believe how many people want to roll over and just let the gov’t introduce yet another tax. Enough!! As someone else mentioned, the gov’t needs to BUDGET….we are not an endless pool of funds for bloated overfunded gov’t pet projects that get awarded to locales where the MP or MPP of the “correct colour” sits.

#88 Classical Liberal Millennial on 09.13.19 at 8:35 pm

DELETED

#89 yvr_lurker on 09.13.19 at 8:38 pm

#79
Raging..
—–
Indeed, all sorts of dirty tricks played during the next 6 weeks. A few weeks back, digging out some old clip regarding Scheer’s alleged homophobia, then the scare of re-examining the abortion issue… now the conservatives trooping up the idea that the liberals will put in capital gains on houses….. every election it looks the same on both sides….. just turn the news off and don’t believe much of anything for the next 6 weeks….

#90 MF on 09.13.19 at 8:40 pm

#49 The WOMBAT on 09.13.19 at 5:03 pm

Lol can’t stand this stupid defeatist type comment.

Why don’t people like this move to the utopia known as Somalia, where there is NO government at all?

Okay I guess I should be nice. Try running for office. Try implementing your vision. See if others agree with it and make a difference.

MF

#91 LP on 09.13.19 at 8:40 pm

#56 Axe head

Your lone sentence has a spelling error in it. (hint: second last word)

#92 MF on 09.13.19 at 8:43 pm

#85 oh bouy on 09.13.19 at 8:27 pm

“twas ever thus.”

Actually for thousands of years 98% of mankind lived in kingdoms as subjects to some monarchy.

This whole domocracy I have a small say thing is actually brand new (and should be protected).

MF

#93 Ray Skunk on 09.13.19 at 8:45 pm

I still can’t get my head around precisely why T2 kiboshed the transit tax credit. It hardly drained the treasury, and provided a small boost to the working poor and students.

I guess just another example of his stunning hypocrisy; flies around the world on vacation every few weeks, yet tells the rest of us to be green. And makes the greener option of getting to work that little bit more expensive.

Did he reinvest the monies saved from eliminating the tax credit back into transit?
No.
Instead he slaps us with a carbon tax, making transit alternatives cost more.

All stick and no carrot.

Just like his term in office… all sizzle, no steak.

#94 Ustabe on 09.13.19 at 8:46 pm

If you or someone you know is needing immediate assistance with mental health issues call 9-1-1 right now. Help is available.

https://www.canada.ca/en/public-health/services/mental-health-services/mental-health-get-help.html

#95 Ray Skunk on 09.13.19 at 8:49 pm

As for Vaughan – another monumental waste of a teaspoon of semen.

I remember the Liberals promise for “evidence-based decision making”.

Evidence – the new Bombardier jets Porter proposed flying into YTZ are quieter than the props they use now. Fact.

Action as soon as they got into office? Blocked jets at YTZ. Which, just happens to be Vaughan’s wish for Vaughan’s ward. Because Vaughan.

A certified cretin, top of the graduating class from Toronto City Council chambers of waste, bickering, virtue and indecisiveness.

#96 A Dollar is a Dollar is a Dollar on 09.13.19 at 8:58 pm

Finally we are on the right track.

Every dollar earned in any way should be taxed equally.

Period.

The result will be lower tax rates for everyone.

Why is this rocket science to so many?

#97 oh bouy on 09.13.19 at 8:58 pm

@#87 MF on 09.13.19 at 8:43 pm
__________________________

more directed to the fact there isn’t much difference between the 2 main parties, not democracy in general.

#98 Steve French on 09.13.19 at 10:07 pm

When you turn an entire national housing market into a “financialised asset”… then it deserves to be treated and taxed like any other financialised asset.

Even your beloved US of A aka Trumpolinistan does that, Smoking Man!

#99 Damifino on 09.13.19 at 10:09 pm

#95 $ = $ = $ = ?

If you are not a hypocrite I expect you will forgo the basic personal exemption on your T1. That amount will be $12,200 for the 2019 tax year.

What’s so special about the first $12,200 of income that it should be exempt from tax?

Set a brave example. Others are sure to follow.

#100 45north on 09.13.19 at 10:11 pm

The Vaughan proposal is simple: anyone selling a house within a year of buying it would have 50% of any appreciation taxed. After two years the capital gains inclusion would be 25%, then 15% after three years, reduced thereafter to 10% and finally 5% in year five

Vaughan is enthralled with real estate. A true believer. There’s been a tremendous run up in real estate, especially Vancouver and the GTA. It’s coming to an end. There’s going to be less appreciation. Where the selling price is up substantially over the buying price, then there’s going to be substantial renovation – it’s just another business.

Without a doubt, residential real estate represents the last, massive pool of virtually untapped tax revenue in a nation of overspendy governments that cannot balance their books.

budget of Shared Services is $1.4 billion. A year. It was created to save money. It hasn’t saved 10¢.

#101 Patricia on 09.13.19 at 10:15 pm

If you lose money selling a house, would it be a personal tax write-off then?

#102 Don Guillermo on 09.13.19 at 10:27 pm

#80 Oakville Sucks on 09.13.19 at 7:53 pm

Andrew Sheer just lost my vote to Trudeau!

This policy is long overdue. Foreign Ownership Tax should also be increased to 50% AT LEAST to keep up with countries like New Zealand, France and the likes!

*******************************************

That’s awesome because Oakville does suck and we are now trying to keep up with New Zealand, France and the likes (wherever that is) when we used to be miles ahead of all of them! Good call. Let’s keep sliding backwards.

#103 Anonymous on 09.13.19 at 10:30 pm

Now if only they applied this sliding scale to my equity portfolio.
5% tax rate on half of my capital gains after 5 years sounds great!

#104 BobC on 09.13.19 at 10:36 pm

Find yourself a Trump. After jerking you back towards the middle you can go back to touchy-feely.

#105 Stan Brooks on 09.13.19 at 10:50 pm

#83 Debtslavecreator on 09.13.19 at 7:59 pm
#92 Ray Skunk on 09.13.19 at 8:45 pm

They are just the farm admins making sure the debt slave farm real owners get their profits.

It is tough times, as the sheeple wants to eat and sleep, they have to keep it lean and mean, producing while preparing for its culling with automation and AI taking over.

If we think now is bad, just wait until it gets much much worse/i.e. with groceries tripping in price.

The sheeple is becoming useless folks, it will be stripped of assets through taxation and inflation and then brushed aside into the suburb ghettos.

The carrot times are long gone, what remains now is he looooooooong stick.

#106 Raging Ranter on 09.13.19 at 11:20 pm

@#88 yvr_lurker, I did better than that. Cancelled all my Bell services including TV (went with Start.ca for internet) so my wife can’t have the news blasting at me every night when I get home. She’s one of those people who has to get her evening news fix, not realizing that it’s just another hour of brain-dead entertainment, and another chance to assail the suitably tranquilized mind (tranquilized from watching all that stupid news) with ads. She agreed reluctantly because she quit work and went back to school fulltime this fall and I convinced her we needed to cut expenses. I’m hoping that a few weeks without TV will have her cured.

#107 Oh Canada, I weep. on 09.13.19 at 11:29 pm

The Trudeau regime has been as feckless and dictatorial as any I’ve seen in the third world. Under Trudeau tribal contests are emerging and heating up. Religion was a pastime, now it’s a fury.

Corruption is obvious, not a once in a lifetime anomoly. Five years ago a convicted fop like Trudeau would have been forced by a morally correct media to step down for a dozen things, from a sex assault to the attempted corruption of an Attorney General. How his foundation has gone from a million to hundreds of millions would not have escaped the impartial anger of the media, now the media has chosen sides.

https://nationalpost.com/news/mounties-lay-secrets-law-charges-against-one-of-their-own

Never in our history have we seen the breakdown of our national fabric to the point where our highest and trusted are now more like Zimbabwe kleptocracy gang rather than what was once a proud group of nationalists. Under Trudeau we are not the Canada he inherited. Is destroying our love for Canada part of his plan?

#108 Fortune500 on 09.13.19 at 11:36 pm

I don’t like Trudeau or the Liberals, but I think this is a great idea.I get taxed on capital gains on my investments, and since homes in Canada are no longer considered shelter but retirement investments, why shouldn’t they also be taxed?

I also think we need an inheritance tax. But that is for another conversation.

Oh, and I would suffer from both, but see the overall benefit for society in such policies.

#109 Anon on 09.14.19 at 12:02 am

The strongest argument for a lower capital gains inclusion rate (versus “income”) is to offset the impact of inflation on asset prices.

With that in mind, I would not have a problem if the capital-gains inclusion rate were bumped up to 100% for “same calendar day” sales of most financial instruments, or “same calendar year” sales of real estate (but still dropping to 50% the next day or next year respectively).

I also could see the principal-residence exemption being time-phased… but it should still go to zero ultimately. Maybe 50% in the same calendar year, but then 25% on 1 January and 0% the next 1 January. If someone has lived in a place for a couple years then surely they really did mean to live there.

#110 Rargary on 09.14.19 at 12:12 am

Heloc guidelines will have to change to account for less money if a property sells so more goes to the taxman!

#111 The Dude on 09.14.19 at 12:13 am

If they started to tax my home then shouldn’t I be able to write off the mortgage interest and other things like a business?

#112 Jon B on 09.14.19 at 12:19 am

Big picture folks. Taxing a PR on the capital gains might or might not happen. It might turn out to be fair and reasonable or it might not. But here’s what I see as a troubling sign; it’s the wealth gap and how government is responding to a society where most have debt and a few have assets. If you are like most Canadians owing $1.77 for each pre-tax dollars you earn, I think you’ll be very happy with future governments. For those who have a positive net worth and hold assets, the bulls eye will be painted on your back.

#113 Ace Rimmer on 09.14.19 at 12:41 am

Interesting piece of paper blow my way on recycling day today. Seems someone on my street was carless with their paperwork. It showed a personal line of credit with a available limit of $850,000 @3.49% interest only payments…… It told me everything I need to know.

I believe most mortgages are fraudulent, banks have no access to your true income, just what you tell and photo shop to them, a little bit of under the table money and the right eastern name you will get anything you want from the right eastern bank manager.

We are in big trouble.

#114 PeterfromCalgary on 09.14.19 at 12:44 am

We got to vote Trudeau out in October or we are all going to go broke paying more taxes.

Besides he is a crook!

#115 PeterfromCalgary on 09.14.19 at 1:05 am

This tax will also make labour less mobile. People who recently bought a house will be less likely to move for a more suitable or better paying job because they will take this tax hit when the sell. That could hurt the overall productivity and competitiveness of our economy as it will reduce both workers and employers ability to exploit new opportunities and adapt to economic change.

It could also mean longer commutes and more pollution as people stay in the same location and drive farther to new but distant jobs rather the move and take this tax hit.

#116 Concerned Reader on 09.14.19 at 1:11 am

Taxing the sale of primary residences isn’t necessarily bad, but this proposal by Vaughan is short sighted and needlessly complex. The tax should be the same whether you own your home for 10 years or 10 weeks. Vaughan’s proposal would probably cost more to administer than it would bring in.

#117 Don Guillermo on 09.14.19 at 1:28 am

#80 Oakville Sucks on 09.13.19 at 7:53 pm
Andrew Sheer just lost my vote to Trudeau!

This policy is long overdue. Foreign Ownership Tax should also be increased to 50% AT LEAST to keep up with countries like New Zealand, France and the likes!

*******************************************

OK, maybe Oakville does suck. You are correct, we are now trying to keep up with New Zealand, France and “the likes” (wherever that is). We used to be miles ahead of all of them. Another Trudeau term and we’ll be trying to keep up with “the likes” of Sudan, Venezuela and Zimbabwe.

#118 Nonplused on 09.14.19 at 2:11 am

#95 A Dollar is a Dollar is a Dollar

Dollars don’t really exist. You think they do, but it’s just math. There is no such thing as a dollar. Dollars are nothing more than accounting slips. These are important accounting slips no doubt, but just accounting slips none the less. They are not real in any way. A power failure would make most of them unusable. A simple power failure. All the money you think you have in the bank is worth nothing until the power comes back.

#119 Reality is stark on 09.14.19 at 2:46 am

Direct taxes such as this are transparent and therefore stupid. Better to dupe your citizens.
Property taxes are the way to go.
Purposely goose the sector by “stimulating the economy”, let the people think their wealth is increasing and then tax the wealth back and take a little extra.
That way the people won’t realize how they are getting hosed while they brag about how much their property has appreciated.
Property taxes are the gift that keeps on giving.
Why be up front with the people?

#120 Treasure Island CEO - 29,987,343.22 offshore on 09.14.19 at 3:26 am

I have been anti-Trudeau but this wins my vote for the upcoming election.

Cap gains exemption should have been ridden loooooooong time ago. Why do you think people are flipping and making a tax free killing.

You say CRA is whacking people. Hilarious. CRA is asleep at the wheel. People are still balls out flipping pre-sale assignments in BC. The gangsters I know laugh at the zero push back and disregard Canadian law. Easy street in the RE market.

I have a feeling B.Morneau rubber stamped this idea.

So, Andrew Scheer wants to remove spec tax? Yeah not voting cons due to this. Bring something to the table Scheer.

#121 jerry on 09.14.19 at 5:09 am

Adam Vaughan has already addressed this on twitter. Here’s his statement

“Fake. It’s taken from a report to caucus on what I had heard at consultations on housing affordability. It is not a recommendation. It is not an idea I support and it was never considered as an option under any circumstance. Our actual record and policy are here @CMHC_ca”

https://twitter.com/TOAdamVaughan/status/1171597534986493953

#122 dr talc on 09.14.19 at 5:32 am

people would trade less=higher prices= higher market value assessments (with mva the property is considered a 100% asset , but if it’s mortgaged they are obviously taxing a liability) so its a dual tax- on inflation an liabilities.

#123 short horses on 09.14.19 at 6:01 am

Adam should go ahead with this. A healthy housing market shouldn’t result in any outsized gains in less than five years: the gains themselves are irrational. This new tax should curb rapid flipping and keep prices rational.

So then for someone selling after five years, having 5% of gains taxed at your marginal rate shouldn’t be so bad — even retired persons, who have planned their estates wisely, shouldn’t feel much heat unless gains are approaching mid six figures (bearing in mind 95% of gains and the full principle remain untouched in theory).

#124 unbalanced on 09.14.19 at 7:03 am

Just think of this! Another final nail in the coffin for Mr. Socks. Didnt care for his old man either.

#125 Marvel Maria on 09.14.19 at 7:11 am

“Without a doubt, residential real estate represents the last, massive pool of virtually untapped tax revenue”

Seems you are forgetting RRSP holdings Mr. Turner.

Wait til you see that creative tax grab.

RRSPs are fully taxed as income. – Garth

#126 Marvel Maria on 09.14.19 at 7:20 am

This real estate tax could backfire in a big way.

IF the real estate market returns to reality and prices drop to normal *insert your definition of normal here), many who were caught up in the speculative FOMO contagion will sell at a loss, possibly even a big one.

So what happens to them?

Do they get a tax break in consideration of the capital loss incurred?

#127 BillyBob on 09.14.19 at 7:22 am

#56 Axehead on 09.13.19 at 5:51 pm
The last sentance in that letter has grammer error.

That last sentence in that post has two spelling errors.

====================================

“The 43rd general election has been called. Your name currently appears on Elections Canada’s International Register of Electors. A special ballot voting kit will therefore be sent to the mailing address provided on your application. It will include detailed instructions on how to complete and return your ballot to Elections Canada. It is important that your completed ballot be received by Elections Canada no later than 6:00 p.m., Eastern Time, on October 21, 2019.”

Excellent. Thanks Trudeau, for reinstating the ability of expats to vote. Sadly, it won’t be for you. Your government is excruciatingly bad.

===================================

Someone described this proposal as “taxing the sale of principal residences”.

No.

It’s taxing the capital gains on the sale of a principal residence. And I’m all for it. I just don’t think I need to vote Liberal to get the policy.

I’m not normally for more taxes. But housing in Canada is absolute, monumental misallotment of capital and something that brings this “investment” in line with the way other investments are already taxed would help correct this.

The whining is to be expected as people see their profits diminished, but only proves the fact that most seem to think a house is a for-profit investment, not a home.

Reversing the mentality that got us to where we are now would be most welcome.

#128 Marvel Maria on 09.14.19 at 7:33 am

One more thing people frequently forget.

When a new tax is imposed, it’s almost always at a lower than planned behind the scenes.

That lets them impose the tax with minimal protest “What’s the big deal, it’s only 5%?”

Read the comments here and you will see some people saying exactly that and even justifying it as a clever ploy to bring the real estate market down to reality.

Once any initial outrage dies down they increase the tax rate.

By that time most people have resigned themselves to it.

So few realize that 5% is just a starting point. Once it becomes generally accepted by the public, it will go to 8%, then 10% then….?

Taxes go up to FEED the government and the leaches within.

Taxes do NOT go up to benefit taxpayers and citizens.

At best we plebes get a few crumbs tossed our way while the government(s) gorge at our expense.

#129 Marvel Maria on 09.14.19 at 7:41 am

“RRSPs are fully taxed as income.” – Garth

Currently RRSP’s are tax at a the rate based on income for the period of withdrawal. The intent being to allow people to defer paying tax until their income level drops (i.e. retirement) when their marginal tax rate is lower.

The important word here above is CURRENTLY.

Mark my words Mr. Turner, RRSP holdings represent a massive tax grab opportunity and it’s only a matter of time before the rules change due to” *insert social justice/common good excuse here.

Why do you suppose that “Basic Income” programs are getting so much attention behind the scenes?

Surely you don’t believe it’s to benefit the citizens?

Hint: It NEVER EVER IS.

Fugeddabboutit. In a society where we are already heading into a retirement crisis, RRSP assets will not be taxed more than at present, upon withdrawal. – Garth

#130 Cici on 09.14.19 at 7:43 am

#49 The WOMBAT

My thoughts exactly.

#131 Bezengy on 09.14.19 at 8:03 am

When governments can claim that they can solve a problem and raise taxes at the same time its as good as done.

The real problem of course is Mr. Dressup promised a surplus in 2020 and he’s 21 billion dollars short.

#132 A Dollar is a Dollar is a Dollar on 09.14.19 at 8:39 am

117 Nonplused said:

#95 A Dollar is a Dollar is a Dollar

Dollars don’t really exist. You think they do, but it’s just math. There is no such thing as a dollar. Dollars are nothing more than accounting slips. These are important accounting slips no doubt, but just accounting slips none the less. They are not real in any way. A power failure would make most of them unusable. A simple power failure. All the money you think you have in the bank is worth nothing until the power comes back.

______________________

Umm, thanks dude, I guess. Did you read when I said…

“Why is this rocket science to so many?”

You just pulled a typical right-wing trick, trying to turn a very straightforward proposal to logically tax all income equally into your own distorted idea of economic ‘rocket science’.

Your attempt to raise existential doubts about the existence of a currency (much better discussed in Economics 101 textbooks, btw) as a distraction from the central issue of tax fairness is truly laughable.

Trying to make something simple and clear obscure and complex is utterly disingenuous, but a common trope for right wingers defending our distorted tax system that favours the wealthy only.

(And Garth, PS, why on earth are you channeling messages for Andrew Scheer? Are you his new sock puppet or something? Sheesh!!)

#133 Future Expatriate on 09.14.19 at 8:46 am

Flipper tax… how awesome is that. Imagine a nation where people stay put and actually take care of their properties instead of doing “screw you” surface flipper renos on top of mould. Imagine neighborhoods full of occupied housing instead of empty properties glutting the market. Seems like divesting real estate from investors is the best thing possible. Of course, to make it perfect, it should be nothing after 10 years.

So take a sad song, and make it better.

#134 Dharma Bum on 09.14.19 at 9:28 am

Every once in a while, the subject matter of this blog makes me want to come out of retirement and start working again, albeit in a new career.

Hired assassin.

Lowest rates in town.

Service with a smile.

#135 oh bouy on 09.14.19 at 9:47 am

just raise interest rates back to historical norms.
problem solved.

#136 oh bouy on 09.14.19 at 9:49 am

@#130 Bezengy on 09.14.19 at 8:03 am
When governments can claim that they can solve a problem and raise taxes at the same time its as good as done.

The real problem of course is Mr. Dressup promised a surplus in 2020 and he’s 21 billion dollars short.
____________________________________

this particular problem began with flaherty and harper.

#137 Smoking Man on 09.14.19 at 9:50 am

The Budget will balance itself. Fool
………..
#120 jerry on 09.14.19 at 5:09 am

Adam Vaughan has already addressed this on twitter. Here’s his statement

“Fake. It’s taken from a report to caucus on what I had heard at consultations on housing affordability. It is not a recommendation. It is not an idea I support and it was never considered as an option under any circumstance. Our actual record and policy are here @CMHC_ca”

#138 Jesse on 09.14.19 at 10:03 am

#1 Message For Adam on 09.13.19 at 2:06 pm
It is about time that profits on home sales get taxed just like any other capital gains. Adam’s proposal is in fact very modest, 5 percent inclusion after 5 years. Our country has turned into a cesspool of speculative greed in the housing market, with many making huge tax-free profits in a the world’s largest housing bubble (as a country). This bubble is largely the doing of government, refusing to counter loose monetary policies, and this “socialism-for-the-rich” policy has disproportionately benefited the home-owning class. There is nothing productive about buying and selling real estate. At least when one buys stocks and bonds, one may thereby be funding productive efforts. In short, taxing profits on selling real estate, whether or not primary residence, is long overdue, and Adam’s proposal is a modest start.
******************************

I can’t tell if this is supposed to be a joke…

#139 rknusa on 09.14.19 at 10:09 am

The US has a tax on capital gains if you sell your principal residence in less than two years

Americans smart

Canadians dumb

That is because they have a mortgage interest deductibility option. – Garth

#140 rknusa on 09.14.19 at 10:12 am

re: US tax on principal residence

and there are exemptions if you sell to move to a new job

easy peasy policy tweak but apparently not to Canadians it seems

If you have a taxable gain on the sale of your home, you might still be able to exclude some of it if you sold the house because of work, health or “an unforeseeable event,” according to the IRS. Check IRS Publication 523 for details.

#141 rknusa on 09.14.19 at 10:20 am

re: #72 Bob Dog on 09.13.19 at 7:18 pm

Houses are no longer homes for Canadian families to raise their children in…A Canadian house is a commodity to be traded on a global market like Shopify shares or bitcoins. Why shouldn’t profits be taxed.

agree just need a sliding scale anything over 250K capital gain is taxed at standard capital gain rate of 15% and gain is taxed progressively higher in 250K increments up to 90%

#142 Dogman01 on 09.14.19 at 10:22 am

One of the prominent Realtors in Calgary is advertising: “ask about our crypto-currency options,”.

Ok so what is up with that, is it an open invitation on a TV commercial for money laundering?

#143 rknusa on 09.14.19 at 10:29 am

re: #138 rknusa on 09.14.19 at 10:09 am

The US has a tax on capital gains if you sell your principal residence in less than two years

Americans smart

Canadians dumb

That is because they have a mortgage interest deductibility option. – Garth

not as many middle class taxpayers use that any more as the standard personal exemption has risen to $12,000 and houses in most of America do not cost north of 500K

#144 Ace Goodheart on 09.14.19 at 10:53 am

The only effect this new tax will have is that people won’t sell their houses anymore.

How is that going to help with prices?

Prices will be adjusted upwards to compensate for the tax

#145 Tannhäuser Gatekeeper on 09.14.19 at 10:55 am

Funny, everybody has a sacred cow — something that they believe in their heart of hearts shouldn’t be taxed. The proffered reason are always well argued.

But for voters, in the end, it always comes down to “tax the other guy, not me,” and for (intelligent) campaigning politicians, it’s usually aiming a sop at perceived swing voters.

Let us examine Andrew Scheer’s proposal not to tax home energy bills. Because… Yeah, no economic rationale given. I bet it polls well.

The bizarre thing, lately, on this blog, is that some posters are calling to tax all income equally, and the counterarguments are all so friggin’ WEAK. This blog’s steerage section is obviously not representative of the finest rhetorical skills in the land, but still… if you are a rentier relying on the continuance of the current system, maybe write a cheque to the Fraser Institute and tell them to start cranking more of it out?

#146 Moh on 09.14.19 at 10:57 am

Looks like I won’t be voting liberal. Some of us would want to sell our principal residence after 2 years not cause we made on the house but my business is doing well. It’s just a way for the government to take more money from you.

#147 Barb on 09.14.19 at 10:58 am

And what of the need for more and more government employees to administer Libs’ ridiculous and discriminatory ideas.

All those “new overseers” need offices, desks, computers, and DB pension plans.

How many new government employees under Lib government so far?

#148 X on 09.14.19 at 10:58 am

Enough taxes. We are already at our limits. Houses technically already have a 4-5% tax in transaction fees. Our mortgage interest is not deductible like in the States. I am taxed on any additional property sales/transactions. Enough.

#149 Rargary on 09.14.19 at 11:09 am

Estate holders will have to hold on a few years longer to sell or distribute funds if the owner is pushing up daisies too soon after purchasing it?

#150 Dogman01 on 09.14.19 at 11:18 am

#83 Debtslavecreator on 09.13.19 at 7:59 pm
#92 Ray Skunk on 09.13.19 at 8:45 pm
#104 Stan Brooks on 09.13.19 at 10:50 pm

Read Gwynn Dyer’s War (the updated version of the Book not the Documentary)

Like Jared Diamond he brings in an anthropological perspective.

Hunter Gather man (HG Man) – many thousands of years is egalitarian, with consensus decision making. Resulting in an evolutionary trait of Mankind trending towards egalitarianism. Hence our almost universal moral sense of fairness.

In comes Agriculture man – (AG Man) he is easy to control with a small force as they are dependent on the land. This results in Big-Kahuna city states and universal oppression by Despots.

Pastoral Man – dependent on herds of moving animals, and often raid Agricultural Man’s areas. Pastoral Man has lower Birthrate then AG Man but much less disease. Pastoral Man remain Free and largely egalitarian like Hunter Gather Man

Once AG man’s Big-Kahuna gets serious about his ego and needs to bring down any threat they start fighting city to city. They now need large motivated armies, this results in a move to Democracy, egalitarianism; as once you arm the mass of citizens they realize they have power and do not have to Kow Tow.

On to Middle ages, chief weapon becomes the Profession mounted and armored knight, Kings were one of many warlords and both needed and could not control their warrior Knight class, hence the Magna Carta, but serfdom for all others (Feudalism). Peasant Levy’s with the technology of the time are quite useless against small bodies of well-equipped professional soldiers.

Renaissance – Kings evolve their power and could now afford elite Professional Infantry armies which ended the independence of Knights, nobility becomes simply an adjunct supporting the despotism of the 16-18 century.

French Revolution and age of Mass Armies. Once again the People are needed, age of revolution and democracy, Freedom and egalitarianism. This continues into World War II.

You can extrapolate form here: Nuclear Weapons eliminate need for mass armies, military becomes highly technological and require only a small cadre of professionals.

You could conclude, that the masses are not needed to defend the realm, they are likely not needed to produce the goods to defend the realm….they are not needed and back to Despotism.

#151 Dr V on 09.14.19 at 11:29 am

131 3D – but we are all taxed the same according to type of income at a certain level, in a certain province.
You will pay the same rate on the 56735th dollar you earn that I will. Likewise the 42576th dollar of dividends we collect. Somebody also pointed out the first $12k of everyone’s income are not taxed. I think I
get a better deal when I turn 65. So should you.

So let’s ask ourselves this.

How is it fair that you and I will pay more of our
65000th earned dollar for tax than our 43800th? If a D
is a D is a D why does it matter how many of them I
earn?

#152 Bdwy on 09.14.19 at 11:59 am

Seems like lots of tax humpers here today. I thought the blog dogs were better off financially so as not to be so envious.

Forget taxing housing that people need. Just increase taxes on booze by 10 times, $ 250 for a case of beer sounds right.
tax new iPhones 500 each
All concerts , movies ,shows, 50 seat tax
Books and magazines 25 “page tax”
Cats. 1000 a pop.
Plenty of tax revenue!

#153 Increase TFSA room for renters on 09.14.19 at 11:59 am

How about we increase TFSA room for renters. We can’t afford to buy a house anyway and we can’t compete with the homeowners who reap the benefit of tax free capital gains on principle residence.

#154 Steven Rowlandson on 09.14.19 at 12:25 pm

If people can make a capital gain on their principle residence the prices will rise to ensure that capital gain. The result is housing that is un-affordable for Canadians. As I said in the past real estate is a place to live and should never be an investment.
The result of not following this is genocide under article 2 section c and d of the UN convention on the prevention and punishment of genocide. Profits should be a result of work, productivity and inventiveness and not from some kind of genocidal extortion racket that puts a necessity of life beyond reach of the workingman.

#155 Steven Rowlandson on 09.14.19 at 12:36 pm

‘More taxes for out-of-control spending’

No doubt the extra revenue will make extra borrowing and spending seem easier to do also. Conservatives are notorious for their zeal for borrowing and spending. Brian Mulroney and Stephen Harper are exemplars in practicing such profligacy. As a citizen I abhor voting for vice and that is why I don’t vote. Virtue is not allowed on the ballot.

#156 Hurray For Adam Vaughan on 09.14.19 at 12:46 pm

Can anyone tell me why the gain of selling one’s own home should be tax-free, when everything else that is sold at a profit is taxed at an inclusion rate of 50%? Why is it that home owners feel so entitled to tax-free gains, especially when the value of their home has been inflated by a factor of 3 to 4 in the past two decades solely due to government and central bank policies?

#157 yvr_lurker on 09.14.19 at 1:42 pm

#120
“Fake. It’s taken from a report to caucus on what I had heard at consultations on housing affordability. It is not a recommendation. It is not an idea I support and it was never considered as an option under any circumstance. Our actual record and policy are here @CMHC_ca”

https://twitter.com/TOAdamVaughan/status/1171597534986493953

——————

Exactly. Just as I said yesterday. A nothing-burger only used at election time to try to get people unhinged and slag the other party. There will be much more of this from both sides over the next 5 weeks. Just ignore the noise and everyone put their critical thinking hats on….
Much better to watch the baseball playoffs than be tuned to the BS that will come out of the news over the next 5 weeks.

#158 slick on 09.14.19 at 1:43 pm

Was the #1 comment a ‘message for Adam’, or a ‘message from Adam’??

#159 Barb on 09.14.19 at 1:57 pm

“Vaughan’s proposal would probably cost more to administer than it would bring in.”

———————————-
since when has that ever stopped government from enacting a tax.

#160 Playing Monopoly on 09.14.19 at 2:44 pm

Many readers like Adam Vaughan’s proposal.
The effect would place an Unregistered First Mortgage on all Prime Residences. To be calculated and paid at the whim of the ruling party as they choose. Mortgages and equity take outs will be effected.
Next Cash cow INHERITANCE TAX and GIFT TAX

#161 Jesse on 09.14.19 at 4:43 pm

#144 Tannhäuser Gatekeeper on 09.14.19 at 10:55 am

The bizarre thing, lately, on this blog, is that some posters are calling to tax all income equally, and the counterarguments are all so friggin’ WEAK. This blog’s steerage section is obviously not representative of the finest rhetorical skills in the land, but still… if you are a rentier relying on the continuance of the current system, maybe write a cheque to the Fraser Institute and tell them to start cranking more of it out?
*********************************

Flat tax for everyone, corporations too, no loop holes. No more wasteful liberal handouts and spending, just focus on the basics: infrastructure, health care and education. It’s not our job to pay for the rest of the world’s problems.

Boom.
Done.

#162 Tony on 09.14.19 at 5:21 pm

Re: #46 Green Party Surfboard on 09.13.19 at 4:46 pm

You’re obliged to pay tax on money earned through crime in Canada. That’s why the CRA has a snitch line.

#163 Linda on 09.14.19 at 5:49 pm

#95 ‘Dollar’ – thanks for the laugh! Seriously, the very concept that taxes would be lowered ‘for everyone’ as per your scenario restores my faith in the innocence & naivety of my fellow humans.

#164 Bdwy on 09.14.19 at 6:15 pm

” genocidal extortion racket that puts a necessity of life beyond reach”

Well I cant afford a house in point grey either, but that’s hardly genocide.

Millions of dirt cheap houses for sale this very second across canada. The tractor guy can show you lots not too far from 416.

#165 Oh Canada, I weep. on 09.15.19 at 12:46 am

The result of a capital gains tax on a house which has been purchased with after tax dollar would be that no one sells their principal residence. Next would be Trudeau’s reaction, tax inhertiances beyond belief so that people would refrain from dying. Nirvana. I’m sure the dope smoking Liberals figured this out long ago.

#166 cto on 09.15.19 at 10:20 am

Flipper bought house beside ours in scarborough 2 years ago, still finishing, yah about 3 years….
i agree with poster number 1. This from a guy who has owned houses all my life. The difference is that i have always owned a a truly principal owner, as you promote Garth, roof over head to live in. Sooo, taxing short term sales,…not so bad. Just about every real estate agent i know is swinging it one way or the other to get the capital gains exemption.
Maybe i will vote for Trudeu.