The homewrecker

Three more sleeps until Justin Trudeau has his way with us. Wednesday’s Throne Speech comes as the virus flares again in Ontario, BC and Quebec, as anti-mask Wexiters rev their pickups through the streets of Calgary, as Trump prepares to pack the Supreme Court in case that election blows up, as the economy starts going Covid-cold for the winter, as real estate bizarrely booms, mortgage deferrals end, three million people shift from CERB to EI and as the cacophony of voices crying for a universal income grows louder.

The bug has done it once more. By pushing the average price of a detached house in Toronto above $1.5 million (new record), the pandemic has widened the wealth gap yet again. Bad enough that wise people with balanced financial portfolios have sailed right through the public health crisis and economic meltdown. Now everybody with real estate has immunity.

At least that’s how a lot of folks see it. The UBIers. Millennials. Renters. Chrystia. The federal government.

You see, this is the worst recession since the 1930s. Public finances have been shredded. Eight million people were on government benefits just weeks ago. Big employers are not calling most workers back now until after Christmas. Maybe the spring. Tens of thousands of small business are just kaput. This is mucho ugly. And yet house prices rose 18% last month year/year. Mortgages are practically free. The kids are pissed.

“Your latest blog entry links to a site, https://www.ubiworks.ca/howtopay, which promotes the idea of a land value tax,” writes Alex. “I have always thought it was unfair that investing in securities is heavily taxed, but investing in real estate is not. I consider anyone who buys a home to be an investor, since I believe the main reason someone chooses to buy a home over renting one is the prospect of untaxed land value and property value (if they do good renos) appreciation.

“I was wondering what you think of this idea? It certainly has a lot of fans including none other than Milton Friedman, but it appears that in Canada, a bastion of socialism, any wealth accumulated from owning real estate as a resident is sacrosanct and therefore should be left untaxed. Thoughts?”

Until Wednesday, Alex.

Source: Iain Emslie, blog dog

Now this is pure speculation, since the prime minister did not accept my generous offer to proof read and fact-check the speech to be delivered in Parliament. But whether the hammer drops this week, in the next budget or soon thereafter, it’s nevertheless poised.

Four years ago (2016) when the Libs started making you report residential real estate sales on your tax return, this blog told you why. No, it was not (as stated) to catch non-Canadians claiming the principal residence tax exemption. It was to start building a database of residential real estate and lay the foundation for a housing tax.

And why not? Although Alex sounds like one of those irritating young bearded Trotskyites, he has a point. Why was the capital gains tax (born in 1972) applied to everything except family real estate? Savings accounts and GICs are taxed. Investment gains are taxed. This one major exemption has hugely skewed personal financial habits, funneling massive amounts of money into houses, wildly inflating prices and turning homes into financial assets, breeding speculation and greed. When Covid came, it got worse. Nesting urges, WFH, pent-up demand, the flight to space and cheap loans combined to bring us here. If there’s one stark, looming, omnipresent embodiment of us-and-them, this is it. The house.

People with property are now the wealthy. And times are tough for the non-wealthy. Guess what that means?

Even the mainstream guys are getting the drift lately. Pop accountant and Globe tax columnist Tim Cestnick recently penned a two-part series on the inevitability of residential real estate taxation. As did this pathetic blog a few months ago, he pointed to CMHC’s funding of a UBC study on housing wealth, inequality and taxation, and included the agency boss’s cry that, “We need to call out the glorification of homeownership for the regressive canard that it is.”

Cestnick also reminds us what the jealous and needy children of Generation Squeeze have to say about housing (that group loves UBI, by the way):

“We need to make it so that no Canadian relies on gains in housing wealth to feel secure, and we need to rethink policies that, by encouraging the financialization of housing, push the cost to buy or rent a home even further out of reach.”

And at the top of the list of things inflating real estate? That’s tax-free profits.

What’s in store?

A first step might be capping the taxless portion of housing appreciation. A quarter million, maybe, like in the US? After that gains are added to income and taxed as such. There could be a minimum period of habitation required to claim that partial exemption. And don’t expect this to come with deductibility of expenses, renos or mortgage interest. That’s not happening.

GST? Maybe it’ll be levied on resales the same as it is on new housing. Limiting tax-free gains and charging sales tax on transactions would certainly help push down valuations. So would a wealth tax – easy to slap on real estate (like the UBI land value tax) because properties have public assessments in place, the basis for local tax.

The main point is simple. Incomes are already subject to a top marginal rate of up to 54% in a bunch of provinces. More tax just decreases revenues. Corporate tax can hardly be raised in a recession with double-digit unemployment and businesses staggering to survive. Investors are already taxed on all their gains while savers pay even more on interest earned. So with the bulk of Canadian net worth sitting in residential real estate – which just inflated 18% in a year – why should homeowners pay nothing?

You see the logic? For some it is inescapable. And that includes the people running the country, plus the cohort of young voters they depend on.

Maybe Wednesday. Maybe the first Freeland budget. Perhaps after T2 romps to his next electoral victory. But it’s coming. You might wish to seek a defence.

246 comments ↓

#1 OK, Doomer on 09.20.20 at 1:47 pm

“as Trump prepares to pack the Supreme Court in case that election blows up,” – Garth

That’s exactly the opposite of what Trump said.

Pelosi, Schumer, Schiff-for Brains and Ol’ Nads are the ones who want to pack the court.

Even the Notorious RBG said packing the court was a stupid idea, but she was directing the comments to her fellow Democrats as they’re the only ones wanting to head down that road.

#2 AACI Homedog on 09.20.20 at 1:47 pm

Photo reminds me of some of the rough properties that I appraised in the last 40 years, for bank mortgages, for eg. Owner usually saying, yeah all this is going to be cleaned up or renovated. Ok. Few weeks later see them with a new boat or truck…haha.

#3 Millennial 1%er on 09.20.20 at 1:54 pm

As taxation gets more comprehensive, the more we’ll see more technically savvy people protect their net worth in cryptocurrency. For those people, hopefully the CRA doesn’t figure out how to break elliptic curve cryptography. I’m genuinely worried that productive citizens will turn to this method of tax dodging and hurt our government’s income.

– sent from my iPad (bought on a 5 year financing term at 2%)

#4 NSNG on 09.20.20 at 1:56 pm

Of course, what the government is clueless to pick up on is why most people put their money in assets that help them to keep from sending money to Ottawa? It’s almost as if they don’t trust the government with money.

Here is an experiment for Justin. Make a tax free economic zone in the most barren place in Canada. See how many people move there and build.

#5 Paul on 09.20.20 at 1:58 pm

So if you buy for $1,5 Million and sell for $1.2 Million you get a $300 thousand deduction.

You wish. – Garth

#6 Robert B on 09.20.20 at 2:03 pm

Garth

I think you hit the nail on the head..

#7 Felix on 09.20.20 at 2:05 pm

Stupid canines wreck every home they enter.

Get a cat, if you’re smart enough.

#8 Flop... on 09.20.20 at 2:09 pm

#70 mousey on 09.20.20 at 12:11 pm

#28 Flop – I have a name for your podcast, “Flop to It”.

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

Hey mousey, if I can’t rope anyone on here in to help me out, I will go with “What the Flop?”

Taxation?

How about we go with, everyone pays tax on everything, or nobody pays tax on nothing…

M46BC

#9 Useless on 09.20.20 at 2:12 pm

Garth, How come you think deducting mortgage interest wouldn’t come along with taxing primary residences?

The point is more revenue, not more deductions. It would be unaffordable with $1.7 trillion in mortgage debt. – Garth

#10 Stone on 09.20.20 at 2:17 pm

If they tax residential real estate, I agree that a non-taxable portion be set and tax anything above that by 25%-50% (I personally like 50%). Maybe set the non-taxable portion to 3x the median Canadian income. This way, everyone can afford to buy a house and anyone paying above the 3x median income is paying a luxury tax. Seems fair. No?

#11 Millennial Surrealist on 09.20.20 at 2:17 pm

Sept. 23, 2020.. the day the music died for boomers..

Time’s up paleos… what a glorious week it will be ….viva la revolution… that’s an EV about to run you over……..

#12 C V on 09.20.20 at 2:24 pm

We are in the 21st century here. Why are most other areas taxed and not real estate? This isn’t 1850 anymore where we need to give away land to try to build a country. I hope something of this nature is implemented so that we can bring back rationality and as a nation be incentivized to invest in more productive assets.

#13 crowdedelevatorfartz on 09.20.20 at 2:27 pm

Well, ……… nothing else has slowed the ridiculous housing sales market.
Slapping houses with a capital gains tax should have everyone from owners to Realtors squealing like stuck pigs.
Let’s see who will blink first….
Trudeau, Freeland or the Real Estate cartels Lobbyists funding Liberal Party election war chests………

#14 Northshore guy on 09.20.20 at 2:29 pm

Governments at all levels have been trying very hard to control real estate inflation, they have put various policies in place like foreign buyer tax, empty house tax, stress test etc..
Nothing seems to have any effect.. all toothless policies.. prices keep going up.
Why?
There is a bad boy on the street which keeps giving unnecessary help to people to buy houses. Nobody can control this bad boy.

His name us BoC.

Nothing will change unless rates go back upto 3% from current 0.25%, and no not in 10 yrs but in 2. People are addicted to real estate and won’t change until they can’t afford the monthly.

#15 crowdedelevatorfartz on 09.20.20 at 2:30 pm

@#11 Milleniall Surrealist
“the day the music died …”

+++

I was thinking this song would be more appropriate for the Canadian economy…….

https://www.youtube.com/watch?v=ZeMlQEWEg2Q

#16 Ferry Boy on 09.20.20 at 2:30 pm

Am I correct in saying that our Real Estate industry accounts for 15% of Canadian GDP .. a lot higher than in the US. And a lot of fees and taxes are paid along the way

So, the (perhaps unintended) consequences of such a tax might be a drop in activity. Less incentive to do renovations a big disincentive to sell/move or put a lot of your money in RE

Just wondering how it will all play out ..

How is change not inevitable when the average SFH in the GTA or Van costs $1.5 million? – Garth

#17 Useless on 09.20.20 at 2:38 pm

The point is more revenue, not more deductions. It would be unaffordable with $1.7 trillion in mortgage debt. – Garth

Good point. But who will vote for a party that suggests this? I think we may be quite a few years away from this. Surely it would be very stupid for millenials to want their inheritance, which will most likely include a house be taxed more. Who knows anymore though. Thanks for the response. Love the blog

#18 The Woosh on 09.20.20 at 2:38 pm

Well, Trudeau does seem tired playing the role of PM. If what you say comes to pass this week, the non-confidence vote will trigger an election. You really think the opposition leaders would let this go through. Political suicide.

The Throne Speech is not a budget. It does not include legislative changes. It signals them. No election forthcoming. – Garth

#19 Lawrence on 09.20.20 at 2:42 pm

I think it should be clarified as this discussion rages that a “land tax” and “property tax” are two very different things. And rightly so. In the past years I knocked down a 60 year old home we had been living in and constructed a new family home for my young and growing family. I used after tax dollars to build the home and did so without leverage (after saving up with this plan in mind).

If, in the future, I am to be taxed on my property value, I am being double taxed on the portion of value I created with after tax dollars (the physical structure).

A land tax, on the land I own, I understand. I have no ability to create additional value on the land, it appreciates over times based on the market.

I think this distinction should be discussed and understood by everyone while a potential tax overhaul occurs.

#20 Bill on 09.20.20 at 2:44 pm

Sorry carried over from 2 blogs ago.
Here they come….the Millens all want a free lunch.

https://www.corona-stocks.com/the-millennials-are-coming-for-the-boomers-money-one-bank-sees-generational-conflict-breaking-out-this-decade/

#21 Axehead on 09.20.20 at 2:46 pm

Love the pic. Going on T-shirt or ball cap.

#22 Millennial Realist on 09.20.20 at 2:46 pm

This will be just the first step towards major changes to increase fairness, social justice, and protecting our planet, Boomers.

Be part of the change.

Or be run over by it.

#23 Wile E. Coyote on 09.20.20 at 2:53 pm

@19 Lawrence

How is your scenario different from investing in the stock market? Investing in stocks also uses after tax dollars. Gains are taxed. By investing I am risking my capital. Why should one be tax free the other not?

#24 Rupert on 09.20.20 at 2:53 pm

Good afternoon and in your opinion will any capital gain taxes on principle residences be retroactive? I just sold last month with massive profit after being owner in Torono market since 1989. Extremely happy to be renting carefree after 30 years of ownership.

#25 Adee on 09.20.20 at 2:55 pm

As long as interest rates remain low, those taxes will in large part just get passed on to purchasers. We can’t underestimate peoples willingness to borrow and bank’s willingness to lend. More unintended consequences.

#26 The Woosh on 09.20.20 at 2:56 pm

#18 The Woosh on 09.20.20 at 2:38 pm
Well, Trudeau does seem tired playing the role of PM. If what you say comes to pass this week, the non-confidence vote will trigger an election. You really think the opposition leaders would let this go through. Political suicide.

The Throne Speech is not a budget. It does not include legislative changes. It signals them. No election forthcoming. – Garth

——————————————

It’s a precursor. At which point the opposition parties fall flat on their faces handing the Liberals a majority.

Looks like O’Toole won’t even be in the chamber for the speech nor to respond. – Garth

#27 Ferry Boy on 09.20.20 at 2:57 pm

Am I correct in saying that our Real Estate industry accounts for 15% of Canadian GDP .. a lot higher than in the US. And a lot of fees and taxes are paid along the way

So, the (perhaps unintended) consequences of such a tax might be a drop in activity. Less incentive to do renovations a big disincentive to sell/move or put a lot of your money in RE

Just wondering how it will all play out ..

How is change not inevitable when the average SFH in the GTA or Van costs $1.5 million? – Garth
=====================

I guess I was not clear in making my point .. and I do agree with you that change is inevitable as its one of the last big sources of untaxed assets

But the point I was (trying to) make in my earlier post was that I believe it will result in a big reduction in the housing sector activity. Less demand for new builds, especially condos. Also, if you are going to be taxed on when you sell, then you might be inclined to stay where you are.

As an example of potential revenue risk for the City of Toronto:

Municipal Land Transfer Tax (MLTT)

MLTT is a tax on the title transfer of real property. The 2018 MLTT revenue budget is approximately $818 million (gross) or 6 percent of the 2018 operating budget.

Are the feds going to re-imburse poor old Toronto for any reduction in its revenue?

#28 KLNR on 09.20.20 at 2:59 pm

with 70% of Canucks owning real estate do you really think said canucks would give their vote to a gov that would add an additional tax to their homes? not gonna happen.

#29 Doug t on 09.20.20 at 3:05 pm

#22 millennial surrealist

You sound so WOKE dude – you use all the “correct” words too :)
The change that is coming is not all rainbows and sparkles – you might want to “get out of the way” as well

#30 Medzy on 09.20.20 at 3:09 pm

This is bad news for anyone counting on the sale of their house to finance retirement

#31 FreeBird on 09.20.20 at 3:10 pm

Wouldn’t all of these added taxes/costs to housing also effect all ages of real estate owners/buyers/sellers incl those who support it? Is this not like shooting your self in the foot? Maybe I missed something.

#32 Wile E. Coyote on 09.20.20 at 3:13 pm

@27 Ferry Boy

Perhaps Toronto could increase the mil rate on the assessed value of real estate and thus property taxes collected in the event people stayed put to avoid taxes on selling a house.

#33 Flop... on 09.20.20 at 3:15 pm

Looks like O’Toole won’t even be in the chamber for the speech nor to respond. – Garth

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

Conservatives should have kept Andrew Scheer in charge until after the COVID crisis was over, as he was much lower risk to catch it.

He never opened his mouth…

M46BC

#34 Yukon Elvis on 09.20.20 at 3:19 pm

I consider anyone who buys a home to be an investor, since I believe the main reason someone chooses to buy a home over renting one is the prospect of untaxed land value and property value (if they do good renos) appreciation.
………………

Not so. I and many others purchased so that we would not have to pay rent or be forced to move in our old age.

#35 crowdedelevatorfartz on 09.20.20 at 3:19 pm

@#22 Milleniall Delusionist
“This will be just the first step towards major changes to increase fairness, social justice, and protecting our planet, Boomers.”

++++
Dont forget to buy the world a coke in that glorious utopia of squeaky clean Stepford children.

https://www.youtube.com/watch?v=1VM2eLhvsSM

The Boomers were way ahead of you Mil…..then we grew up.

#36 Jimmy Zhao on 09.20.20 at 3:20 pm

Should I take some of my stock capital gains now?

lest the Justin Trudeau Liberal government change the capital gains exemption from 50% to 70%

#37 The real Kip (Ret) on 09.20.20 at 3:22 pm

Fat chance the Libs will tax principle housing. Nothing but fearmongering here.

#38 KNOW IT ALL on 09.20.20 at 3:23 pm

DEFENCE……. SILVER & GOLD.

Your about to miss out on when hell of a run-up.

Dont believe me….. see what Ray Dalio is buying.

https://markets.businessinsider.com/commodities/news/gold-price-ray-dalio-invested-400-million-precious-metal-q2-2020-8-1029501695

#39 GRG on 09.20.20 at 3:23 pm

Residential housing is a fundamentally unproductive asset. The more capital the Canadian economy has tied up in housing the less there is to invest in the truly productive parts of the economy (assuming there’s any of those left, post-COVID).

The Liberals have been talking about taxing housing since the T1 days…I can recall Dept of Finance “imputed rent” discussions dating back decades.

But why not level the playing field and tax housing on the same basis as every other type of “investment”, including carry forward of capital losses and the same deductions for interest and other eligible costs? “Can’t afford it” doesn’t wash as a reason in these times of $340+ Billion deficits and talk of UBI. It would appear there is nothing we can’t afford, LOL.

#40 Idiocy on 09.20.20 at 3:25 pm

Dear Mr. Turner,

If your tax related ‘predictions’ come to pass , how would this affect the value of the Cdn $ in your opinion (ceteris paribus ) ?

On one hand, it improves gov’t revenues which would make the newly increased deficit / debt easier to service.

On the other hand, it might reduce a large component of GDP , and in the absence of other strong growth drivers of the economy, reduce economic activity markedly.

Would you please give us your thoughts this ?

Many here would probably greatly appreciated it.
Thank you.

#41 the Jaguar on 09.20.20 at 3:26 pm

So tantalizing are tender morsels of common sense such as ‘“We need to call out the glorification of homeownership for the regressive canard that it is.”, that the Jaguar feels compelled to climb down from my tropical tree branch. This Tim Cestnick guy and Evan Siddall seem to live on the same side of the looking glass. I’m an instant fan. Hand me that glass of Kool-aid, guys.

I like this final comment of Garth’s as well…’ You might wish to seek a defence.’ It reminds me of all the parents who goaded their kids into premature home ownership and also agreed to be on title to the property in order to make mortgage financing workable. The devil will be in the details if capital gains on housing are taxed. Will all parties on title be subject to the tax even though only one might claim the property as a ‘principal residence’? Will some rush for release of covenant in order to be removed from title? Hand me my smelling salts, quick like a bunny.

Just say ‘no’ would be my advice to all mortgage holders whose hard working employees should be spending their time on activities that generate revenues in company coffers versus participating in some peeps struggles to outrun the tax man.
“‘Cause I’m the taxman, yeah, I’m the taxman” …(Lyricist – George Harrison)

#42 Victoria on 09.20.20 at 3:29 pm

Alex says: “I consider anyone who buys a home to be an investor, since I believe the main reason someone chooses to buy a home over renting one is the prospect of untaxed land value and property value (if they do good renos) appreciation.”

What utter nonsense! People bought and buy homes because they want a yard for the kiddies and dogs. They don’t want to be at the mercy of a landlord who can sell anytime and uproot you. If Alex represents the generation who will change policy, we are in trouble.

#43 Leftover on 09.20.20 at 3:29 pm

There’s nothing left to tax but houses. How they do it doesn’t really matter. Hopefully they make it simple.

If the bubble bursts and heads explode…oh well. Time for equilibrium.

#44 cto on 09.20.20 at 3:42 pm

trust me, im no fan of trudeau, and i own my home out right. if this happens, dont blame Trudeau, hes just looking for where the money is…
Blame the BOC and past gov policies…
The BOC turned debt into CASH! Yes,… they are clearly to blame.
Past Govs made that debt good to use housing as investments, like stocks.
Now housing is like GE or coca cola stocks back in the 60s. Does it still represent a roof over head, yes, but that idea has been lost many years ago, thanks to the CBs and Canadian Gov policies…
This, like raising rates will create the end in Canada for the 1/4 centr0
centry housing boom.

#45 Northshore guy on 09.20.20 at 3:46 pm

I am a millennial but the late kind, soon to be 40

I can’t understand the hatred towards our older generation, sure they are house rich but they didn’t do it themselves, it was the slow melt of interest rates over the last 30 yrs and bad government policies. They benefited, but they are in no way responsible for this mess.

Politicians are using this jealousy to get elected while BoC does nothing. Wake up, don’t become an instrument for these political entities.

#46 conan on 09.20.20 at 3:47 pm

I think the Cons would be nuts to throw their cards in and ask for an election. They trumpet the WE scandal, but come on, so far it is a pile of nothing burgers. The most serious was Mourneau’s 41 k trip, but he was on a trip that no one was paying for. It was the charitable equivalent of a free trip to Vegas for the whales.

No way that Donald does not hurt the Cons in Canada, even just by osmosis, he hurts them. Second, the Liberals have a solid 5 point lead, and because of the miracle of strategic voting, the Cons need a 5 point lead to seriously consider an election.

I expect chicken coop sounds from the Cons after the Throne Speech. It would be like asking for their own demise

#47 AntMan on 09.20.20 at 3:50 pm

Nonsense.

#48 Brian Ripley on 09.20.20 at 3:51 pm

Yes, tax reform is needed.

The APT (Automated Payment Tax) is a micro tax taken at every financial transaction where each side of the transaction gets debited a small amount of capital that is credited to the government in a revenue neutral algorithm. Professor Feige’s team modeled the U.S. economy from late 1990’s data and realized that it would take less than 2% (split 50/50 between each side of the transaction) of every financial transaction to produce a revenue neutral state where all the government’s fiscal objectives were met.
Source: http://www.chpc.biz/history-readings/tech-talent-and-real-estate

The APT would eliminate the need to file tax or information returns. That in itself should provide enough incentive to read the 41 page PDF study by Feige.
Source: http://www.chpc.biz/uploads/9/7/9/5/9795010/taxation_for_the_21st_century.pdf

Advantages of a Flat Rate FTT (Financial Transaction Tax) October 2010 by:
Simon J. Thorpe, CNRS Research Director (DRCE), CerCo (CNRS-UT3), TMBI (Univ. Toulouse), BrainChip Inc

A Flat Rate FTT is fair.
A Flat Rate FTT is cheap to implement.
A Flat Rate FTT would be virtually impossible to avoid.
Removing conventional taxes would make tax havens largely irrelevant.
A Flat Rate FTT would provide a level playing field.
A Flat Rate FTT taxes those actors in the economy who can pay.
The abolition of taxes on profits would be a major incentive to the economy.
Increased incentives to short production supply chains.
Increased incentives for local exchanges.
Source: https://hal.archives-ouvertes.fr/hal-00530144/file/A_flat_rate_FTTv3.pdf

This is doable, we have the technology but not the will… yet.

We are locked into centuries old carrot and stick approaches to taxation.

A micro tax on all financial transactions would allow us to easily take on the looming problems we face.

Will a new generation please step up because my boomer cohort is asleep on tax reform and Gen X-ers are not interested but Millennials (born between 1981 and 1996) could because they have the census advantage now.

Go for it.

#49 MF on 09.20.20 at 3:54 pm

The cynicism is starting to get tiring.

Yes residential real estate should be taxed. Why is it not already? This thing is a runaway freight train. Real estate is not “bizarrely” on fire lately, it’s on fire because interest rates were stupidly dropped to zero again, and were too low to begin with.

This is the reason why young people are getting pissed off. None of the real estate appreciation was earned. Tax it already. This is the social consequence of 12 plus years of low interest rates. We knew that was coming.

The rest of the post?

Lol.

I read the comments the other day about a UBI or GBI on the CBC’s website. Looks like it has maybe 5% approval? If that.

And what is with this idea that the Liberals will “romp” to re election? Polls ? Did we not learn that polls are useless in 2016 down south. Where is this guaranteed re election idea coming from?

Now we have to read from the terrified clowns in the comment section yelling the sky is falling. Run ! Big bad GBI is coming for you in the night lol.

MF

#50 Dougie on 09.20.20 at 3:59 pm

As you suggest Garth, the logic seems inescapable. There are some negative impacts to be expected however. One is the fact that on the face of it, CGT will affect employment mobility. An employee asked to move from Van to TO with his or her family, will face a significant loss of housing purchasing power after paying the tax assessed on the Van sale. Unless this is somehow reimbursed, the employee will probably be unable, or at least unwilling, to move. I think there will have to be a tax-deferral mechanism to allow such an employee to carry forward the entire sale price which would then be re-invested in TO.

#51 MF on 09.20.20 at 3:59 pm

This super hero guy said it better than I did:

#47 AntMan on 09.20.20 at 3:50 pm
Nonsense.

MF

#52 Barb on 09.20.20 at 4:02 pm

Great graphic, Iain Emslie!
Unfortunately, it’s accurate.

“…no Canadian relies on gains in housing wealth to feel secure,…”

Perhaps we should simply unlock the front door so the proletariat doesn’t have to kick it down?

#53 Irish Stew on 09.20.20 at 4:12 pm

Funny how the govt works…..look for more ways to increase revenue via taxation.

If this were private business, it would look for ways to decrease spending.

There is the difference.

#54 Linda on 09.20.20 at 4:14 pm

I find it interesting that the concept of any Canadian feeling financially secure is apparently grounds to destroy said security. Apparently humanity isn’t facing enough challenges or stress as it is. There is a reason why envy is one of the seven deadly sins. It corrodes, it destroys & it fuels an insatiable desire to ensure that ‘if I can’t have it, no one can’.

Also, can anyone explain how adding yet another tax on home ownership – homes that were purchased with after tax dollars – will make it easier for anyone to buy or sell a house? What about those who were planning on selling to fund their retirement? At what point will what is currently considered an asset become a millstone of never ending financial woe?

How does it differ from selling financial assets to fund retirement? They were also bought with after-tax cash. I think this is what may question. – Garth

#55 Spectacle on 09.20.20 at 4:17 pm

Ģosh.
This growing hatred for “Success” and being ” Self Reliant” , distain for those being “Productive” in Canada is shocking.

Its some renewed historical “Off with Their Heads” ( but not mine) condition.

#56 Paul on 09.20.20 at 4:18 pm

Toronto land transfer tax on $1.5 million is $53,000 plus Hst. On legal and realtor fees not to mention discharge cost on mortgages.Ya why not pile a on little more.

The property’s resale value grew $252,000 in 12 months. If a financial portfolio is not exempt from tax on market growth, why is that of a house? – Garth

#57 paulo on 09.20.20 at 4:19 pm

The capitol gains exemption on principal residence is a
dead horse running. to much abuse and fraud and its a major contributor to the out of control and rampant
speculation currently destroying the residential real estate market.
So either eliminate it entirely or restrict it:
Possibly a limit of 250K before the balance taxed at nominal tax rate and a limit of a once in a life time exemption per citizen.

#58 drydock on 09.20.20 at 4:20 pm

#29 Doug t on 09.20.20 at 3:05 pm

((((((((((((((((((((((((((((((((((((((((((((((()))))))))))))))))))))))))))))))))))))))))))))))

Flapdoodle’s been trolling here for a while now.

#59 Yuus bin Haad on 09.20.20 at 4:21 pm

“just isn’t true” – Adam Vaughan, Sep 2019

“We will cancel the GST” – Jean Chretien, 1993. – Garth

#60 EG on 09.20.20 at 4:23 pm

FinCEN @ buzzfeednews.com unbelievable global corruption . Very disheartening. I hope our banks aren’t involved. If they are . It would not surprise me .

#61 Kurt on 09.20.20 at 4:23 pm

#31 FreeBird – the idea is to reduce the attractiveness of real estate speculation. Garth believes (and I concur) that the high prices in Vancouver and T.O. are due to speculation. The decrease in profitability of speculation should lead to a deflation of the speculative bubble much greater than the additional cost, though the timing of this would be uncertain.

#62 Boom on 09.20.20 at 4:23 pm

#24 Rupert on 09.20.20 at 2:53 pm
Good afternoon and in your opinion will any capital gain taxes on principle residences be retroactive? I just sold last month with massive profit
———
Hopefully.

#63 Dolce Vita on 09.20.20 at 4:25 pm

Gov Canada hard up for cash.

A large source of untaxed wealth are RE proceeds of sale.

Put the above together and it’s predictable.

Just add the proceeds to income that year just like they do if you cash in an RRSP.

Gen Squeeze will be happy then that they are splitting their INHERITANCE with Gov Canada.

Forgot about that didn’t you #11 Millennial Surrealist?

Always be careful for what you ask for…

#64 HH on 09.20.20 at 4:26 pm

What’s the defence? You either pay a mortgage or you pay rent. When I rented it never went down. Always up. Mortgage balances, over time, go down until eventually you have no mortgage payment. Your balance sheet improves. Rent is an expense so it doesn’t show up on your balance sheet. But it eats into your monthly income every single month.

You ascribe no value to housing equity, which can be invested, and assume renters invest nothing. Flawed thinking. – Garth

#65 MF on 09.20.20 at 4:30 pm

53 Irish Stew on 09.20.20 at 4:12 pm

It’s not a business. It’s a government and is not for profit and should be run as a business.

2. Elected officials implementing policy for election purposes do not equal “the government”.

MF

#66 MF on 09.20.20 at 4:31 pm

#64 MF on 09.20.20 at 4:30 pm

1. That’s governments should “not” be run as a business. Thanks IPhone.

MF

#67 Sara on 09.20.20 at 4:39 pm

It’s about time that the astronomical gains on housing be taxed as are all other capital gains on assets purchased with already taxed monies.

With regard to a partial exemption, perhaps instead of a specified dollar amount of allowable gains(example 250K in USA), a percentage of gain per year of ownership be allowed, with anything over that deemed taxable. For example, the amount of tax free gain allowed per year could be set to the inflation rate. That way, people who’ve lived in their homes for years -perhaps in a not so hot market – would pay less tax than someone who bought only a few years ago in a hot market.

There are ways to make this fair, though yeah, some people are going to have to give up some of their expected lottery winnings. Shrug.

#68 John on 09.20.20 at 4:42 pm

IMO this is just wishful thinking. There’s NO WAY a government will introduce a tax on the primary residence as long as there are more home owners than renters. This would be political suicide. “Taxing the rich” works because most of the people are not rich. No government will start eating from the nest egg of 70% of the population and still hope to get re-elected.

You ascribe no value to housing equity, which can be invested, and assume renters invest nothing. Flawed thinking. – Garth

What about when the amounts of the monthly payment for rent and the monthly payment for the mortgage are the same? The rents went up, as well as the mortgages. So is it really smarter to keep paying rent?

Renting is a valid option for many, especially the young who (more than ever) need mobility to land the best jobs. Homeowners never just pay the mortgage – add in closing costs, financing charges, property taxes, insurance, maintenance, condo fees, repairs and renovations. Then fork over 5% or so to sell. Plus HST. If capital appreciation is not factored in, renting is a far cheaper way to live. – Garth

#69 ImGonnaBeSick on 09.20.20 at 4:47 pm

Always Fantastic Taxes and Where to Find Them…

When the tax burden for each Canadian is more than basic necessities (which it currently is by a long shot) – I would say we’ve had enough taxes… Really why do we need more government and services than we did 10 years ago? Is anyone actually happen with the direction this country is going? And if so, could you please explain to me why?

Mr. Trudeau just spent $340 billion more than the government collects, in six months. He is preparing to spend more. This dooms you, your children and their children to additional tax. – Garth

#70 Dominoes Lining Up on 09.20.20 at 4:56 pm

#27 Ferry Boy

“As an example of potential revenue risk for the City of Toronto:

Municipal Land Transfer Tax (MLTT)

MLTT is a tax on the title transfer of real property. The 2018 MLTT revenue budget is approximately $818 million (gross) or 6 percent of the 2018 operating budget.

Are the feds going to re-imburse poor old Toronto for any reduction in its revenue?”

__________________

Very good point. My contacts in the gta who deal with property taxes in Peel and Toronto tell me that the bureaucracy is sh*****g bricks over this.

Cities have become addicted to MLTT as a way to fund basic services while reducing property taxes. Toronto, for example, has the lowest property tax rate in all of Ontario – imagine that.

There is already going to be many layoffs in municipal public sector jobs due to covid, but not until 2021. Changes to real estate transactions will multiply this effect by taking away more MLTT revenues. This was already forecast even before covid. Any drop in property values will have an exponential effect on those revenues.

Municipal workers might want to get ready. My contacts tell me they expect to see 20-40% of all city government workers laid off by next year without a magic wand of federal/provincial money to get them through the next few years.

If the bank experts are now telling JT not to spend so much and MLTT drops, this could get ugly next year. City budget preparations may take a wild swing after next week and debates/discussions are starting soon, in December and January for cities.

The municipal addiction to real estate MLTT revenues has been crack cocaine for far too long. Looks like that side business is about to be crushed.

#71 Wile E. Coyote on 09.20.20 at 4:56 pm

@66 Sara

By your logic money I invested in a stock, the same year someone else purchased a house, should be adjusted for inflation prior to taxing the gain. Not going to happen.

#72 Broader mind on 09.20.20 at 4:58 pm

Stop all taxation and run deficits. Then shift to negative rates and make out like a bandit. That’s the plan.

#73 Yukon Elvis on 09.20.20 at 5:01 pm

#63 HH on 09.20.20 at 4:26 pm
What’s the defence? You either pay a mortgage or you pay rent. When I rented it never went down. Always up. Mortgage balances, over time, go down until eventually you have no mortgage payment. Your balance sheet improves. Rent is an expense so it doesn’t show up on your balance sheet. But it eats into your monthly income every single month.

You ascribe no value to housing equity, which can be invested, and assume renters invest nothing. Flawed thinking. – Garth
……………………………………..

Investing one’s housing equity and risking paying rent / and forced relocation again would be flawed thinking. No one wants that in their old age.

Lots of people rent very successfully as they age, enjoying income that was once trapped in house equity. Many of the senior house-bound, cash-starved, unhappy folks I talk to are making heartbreaking mistakes. – Garth

#74 The real Kip (Ret) on 09.20.20 at 5:02 pm

Does anyone know whatever happened to Evan Siddall and his cacaphony from the CMHC et al telling of a catastrophic 20% collapse in Canadian real estate?

Today we are to believe that it’s increased 18%. That’s a spread of oh, about, 38%. LUCY! You got some splainin to do!

His forecast was for 2021. He made it a couple of months ago. In your world that’s long-term, I know. – Garth

#75 Mathew S Gibson on 09.20.20 at 5:03 pm

#1 OK, Doomer on 09.20.20 at 1:47 pm
“as Trump prepares to pack the Supreme Court in case that election blows up,” – Garth

That’s exactly the opposite of what Trump said.

Pelosi, Schumer, Schiff-for Brains and Ol’ Nads are the ones who want to pack the court.

Even the Notorious RBG said packing the court was a stupid idea, but she was directing the comments to her fellow Democrats as they’re the only ones wanting to head down that road.

—————————————–

So that’s the view when you are so far to the right Trump looks like a centrist. Interesting.

#76 Howard on 09.20.20 at 5:05 pm

Ideally the implementation of capital gains tax on principal residences (and yes, it is time… it is SO time for that to happen) would be coupled with lower income taxes. Reward productivity and instead tax real estate appreciation like the lottery ticket that it is.

#77 David Pylyp on 09.20.20 at 5:06 pm

How is this tax to be added to the already installed:
Lot levy
Development fees
Municipal land transfer tax
and the annual municipal land tax of about 1.5% of assessed value?

I’m sorry, that some think government largesse will look after me in retirement.

David Pylyp
Every thing is now virtual…..

#78 Lawrence on 09.20.20 at 5:08 pm

@ Wile

Re: after tax dollars for investments. I sort of see your point, except you don’t pay GST when you buy an investment and it doesn’t depreciate.

If I can amortize and expense against gains or taxes the personal property value I created (like a business can) then sure. Just like with an investment you can deduct interest against gains. Property (as opposed to land) is very different. If it is treated in a similar fashion as corporations when looking at being taxed in a personal capacity then that would make sense.

#79 Econ101 on 09.20.20 at 5:08 pm

@ #63 HH

The $400 a month I just negotiated off my rent for the next two years is certainly a slap in the face against your logic. And yes Garth, all of it is being invested!

Great post Garth. One of your best!

#80 Howard on 09.20.20 at 5:24 pm

#67 John on 09.20.20 at 4:42 pm
IMO this is just wishful thinking. There’s NO WAY a government will introduce a tax on the primary residence as long as there are more home owners than renters.

—————————————

Implementing a tiered PR capital gains tax would largely solve the political implications. Say, if you live in the home for 10 years you pay no tax, if you live there less than 2 years you pay full tax (no exemption), and various tiers in between. Admittedly this makes it slightly more complicated to administer, but not really.

The Liberals can therefore paint it as a tax that won’t impact honest, hardworking long-term community-building homeowners, but will instead target short-term flippers abusing the PR exemption.

#81 Sara on 09.20.20 at 5:25 pm

@#70. It’s not just a matter of logic. Homes are emotional. Stocks/ETFs/GIC’s, etc are not. There needs to be a way to make the taxing of home equity gains somewhat palatable to “the 70%” while simultaneously raising tax revenue and making homes more affordable for younger Canadians.

#82 yvr_lurker on 09.20.20 at 5:36 pm

We’ll just wait and see on this one. For those homeowners who have put mucho $$$ into renovating a home that they plan to live in long term and that increases the value of the house, it would be punitive to tax the shit out of the increased value at the time of sale. I can see them putting in some tax on short term ownership, but when takes a tear down house in Kitsilano (for example), of which there are many, and spend a few hundred grand fixing everything, when it comes time to sell one would think that the $$$ you put in (with after tax income) would have to immunity from tax at whatever the selling price is. Otherwise, who the hell is going to go to all the effort to renovate places to live in long term. Make no sense.

It is a bogus argument that people living on capital gains and dividends pay enough tax at this stage. The corporate tax rate (for large businesses, high tech, media Netflix, Amazon, etc..) is too low. This is the group that they should go after for tax increases, Also jack up the overall GST on non-essentials like Chretein and Martin did so that everyone who can’t resist the tempation to be super-spreader consumers will contribute.

I was in the car today listening to the CBC with some dude advocating for a much greater Gov’t financial support for those addicted to drugs and comparing it to the Covid situation. Frankly, this is a complete bogus I realize that once you are addicted it is tough to get off: but taking drugs is a poor life decision. Why should the rest of society continually have to deal with and pay for people who can’t get their ((&^&% together one way or another. Don’t have much empathy for that lot.

#83 kommykim on 09.20.20 at 5:45 pm

RE: “I consider anyone who buys a home to be an investor, since I believe the main reason someone chooses to buy a home over renting one is the prospect of untaxed land value and property value (if they do good renos) appreciation.”

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

Well Alex, you are wrong. I can’t give two hoots if my property increases in value. My reason for buying was to be in control of my immediate environment. A house is only an “investment” if you cash out and never buy again. Grossly inflated RE prices only make it more expensive to move because land transfer taxes and Re commissions are all percentage based. Higher RE prices also drive up the costs of construction materials and labour which makes house maintenance more expensive.

#84 Proportions on 09.20.20 at 5:48 pm

So if the profit from the sale of a real estate holding is to be taxed upon sale, logically the lower the sale price, the lower the tax to be remitted. Thus, if one were to ensure that, wait for it, one’s net worth were balanced with no major share in on asset favoured over others then the tax burden would not be waiting, like death in Samarra, to relieve the home owner of some of the profits.

#85 Winterpeg on 09.20.20 at 5:57 pm

Does this mean you are somewhat in agreement with taxing principal residence, or are you just playing devil’s advocate? (to educate us as usual)

#86 Thomas on 09.20.20 at 6:00 pm

none of this doom and gloom will get realized. No party is whishing elections from now to at least 6 months time. As such, no party, including liberals will not push revolutionary items on the table, as the issue of taxing home values. They will simply continue to print dollars, as every country does. Remember Harper changed the retirement age from 65 to 67 y.o. and people voted Justin to scrap that change afterwards. Justin knows that better…. If you want defence as Garth says, just buy gold.

#87 Stealth on 09.20.20 at 6:01 pm

Hi Garth,

Which Defense shall we seek?

#88 COW MAN on 09.20.20 at 6:10 pm

Sir Garth:
Let us all hope that if this residential taxation of capital gains is implemented it will be done in the same manner as it was in 1971, when introduced on farm land etc. That the value is on the value at the date of implementation, not the date of purchase.

#89 willworkforpickles on 09.20.20 at 6:18 pm

#28 KJNR
Better than half of the voting public are tied into RE in Canada. I would agree that sweeping changes to real estate taxation won’t be coming if libs want to stay in power.
All of which brings me back for the umpteenth time to the same subject I’ve been on for the last 6 months… mostly ignored.
Vote buying JT printing ginormous amounts of money to pay and give as he pleases.
The inflationary build-up to come in times of combined unparalleled unemployment and runaway government debt creation is a toxic combination not seen before. Do the powers that be have any clue what to do. No!
What they will do is print to infinity.
Leave new taxation…RE related, largely alone.
Give – dollars for voters – free cash out the wazoo with assurances of more to come.
Let inflation build, try to lie about its existence (won’t work) a little dollar devaluation here a little dollar devaluation there, no worries… lie some more, then raise interest rates and lie some more.
More and more lies this way cometh. Maybe a marching band with bass drum and cymbals, as a loudspeaker blares…It’s all good It’s all good……..
…blah blah blah…
until then when it isn’t.
.

#90 IHCTD9 on 09.20.20 at 6:26 pm

Taxing PR CG’s is one move most lefties and righties of all ages could agree on. Just needs to be done right. 5 years ownership minimum, make it painful enough to nuke the urban specuvestors. Ten years would be better, start at 100% in year one, work your way down to zero by year 10. It would solve so many RE issues, even if government revenues from this would wane as speculation dies off.

This could kill the mania over houses in the metros, and still not murder the folks who owned a house to live in, and bought 30-40 years ago.

But will Justin get it right? Probably not, based on his record so far.

#91 Trojan House on 09.20.20 at 6:27 pm

I remember the line from Field of Dreams “if you build it, they will come.” So, for decades house prices gained at modest rates and then after 2008, interest rates were brought to almost zero and values exploded because people could afford more home making less money. The Feds actually encouraged it with their policies. Then Covid hits and they plunge interest rates to near zero again and what happens? Home sales explode driving values up because, once again, people can afford to buy more home even though they may not be making more money.

So tell me, who is to blame for this? The government or the home buyer? The government wanted to encourage borrowing to kick start the economy but what they did was to blow a huge housing bubble. In my opinion, they have nobody to blame but themselves.

#92 Dogman01 on 09.20.20 at 6:31 pm

https://www.youtube.com/watch?v=tWJ5QapOFzI

Canadian Dream

I went out on the street today
The Canadian Dream was as far away as it’s ever been
As it’s ever been

S.O.C.I.A.L.I.S.M. is here to stay
S.O.C.I.A.L.I.S.M. is the only way

Frozen land, frozen minds
Frozen hands and frozen time

‘Cause everything moves real slow when it’s forty below
Everything moves real slow when it’s forty below
Yeah, everything moves real slow when it’s forty below
When it’s forty below

S.O.C.I.A.L.I.S.M. is here to stay
S.O.C.I.A.L.I.S.M. is the only way

#93 Nonplused on 09.20.20 at 6:32 pm

I can’t believe I have to keep reminding everyone of this: Houses are already taxed by the municipality. And over a lifetime it is substantial. Probably more than a lot of people pay in income tax.

But there are other factors that make taxing primary residences immoral. Property taxes by the municipality are not immoral as they can be seen as user fees for the roads, schools, soccer fields, parks, bike paths, swimming pools, garbage collection, etc. Municipalities actually do provide services for the money. But anyway back to the immorality of treating a house as a business or investment and taxing it as such:

First of all, a principal residence is not a business, it is a consumer item. It more resembles a car or an RV. Ar we going to get deductions for those? I don’t think so.

Second, a house is a house, it is not money, nore does it kick any off (unless it is rented, but the landlord already pays tax). When you sell one house and buy another, maybe you had to move for work or something, you haven’t made any money. So, if you had considerable appreciation in the market, you’d probably have to get a mortgage to pay the tax. This is going to make moving prohibitively expensive for most people.

Third, and this one is important, the rampant inflation we see in housing is a direct result of government policies. The 2% five year mortgage and CMHC insurance are the drivers of this craziness. Letting the government both dictate housing policy and tax it is like putting the fox in charge of the hen house.

Forth, aside from the bubble valuations, much of the appreciation in housing is driven by good ol’ inflation. The government controls that too, so in effect they are proposing to tax inflation. More foxes in the hen house.

Fifth, any tax increase applied anywhere in the system affects everyone though the market mechanism referred to as “the invisible hand”. We all pay the same effective tax rate. All taxes eventually end up in the cost of goods and services. It doesn’t matter if it is a carbon tax that truckers have to pay to get your organic vegetables to Whole Foods or whatever it is, it gets baked into the final price you pay. There is no where else for the money to come from. The money has to come from somewhere.

Sixth, it goes directly against the policy of making housing affordable. Sticking a new tax on primary residences makes them less affordable, not more.

Seventh, (I had to get to seven so it was like the seven deadly sins) taxing primary residences will heavily favor landlords and the corporate model residential housing. We’ll all end up renters. Why buy if you won’t be able to afford to move in the future should you need to? It’s already bloody expensive.

That’s enough reasons for now but there are more. It’s a horrendously bad idea. Doesn’t mean they won’t do it though.

————————————

The two main devices most people use to save for retirement are houses and RRSP’s. It seems like what they are proposing with this UBI nonsense is to take both those methods away and replace it with a government check that everybody gets whether they earned it or not. Does anybody else here think that might not be a very good idea? The government screws up everything they touch.

It is time to head for Galt’s Gulch, if you can.

#94 IHCTD9 on 09.20.20 at 6:33 pm

#79 Howard on 09.20.20 at 5:24 pm
#67 John on 09.20.20 at 4:42 pm
IMO this is just wishful thinking. There’s NO WAY a government will introduce a tax on the primary residence as long as there are more home owners than renters.

—————————————

Implementing a tiered PR capital gains tax would largely solve the political implications. Say, if you live in the home for 10 years you pay no tax, if you live there less than 2 years you pay full tax (no exemption), and various tiers in between. Admittedly this makes it slightly more complicated to administer, but not really.

The Liberals can therefore paint it as a tax that won’t impact honest, hardworking long-term community-building homeowners, but will instead target short-term flippers abusing the PR exemption.
— –

Yep, just enough, for long enough; to make home flipping a no win situation. No more, no less.

#95 dr talc on 09.20.20 at 6:35 pm

How does it differ from selling financial assets to fund retirement? They were also bought with after-tax cash. I think this is what may question. – Garth

The difference is the amortization schedule, buy a house for 1 million, after the 25 yr amortization schedule you’ve paid about 2 million
It’s a lot of things, but not profit. Profit is on the lender’s end.

#96 Old Ron on 09.20.20 at 6:36 pm

They could increase Capital Gain Taxable to 100% on non owner occupied property. Maybe add a flat rate “flip tax.“

But be careful, because Ontario runs on real estate. Since 2016 18% of Ontario growth in GDP has come from Real estate transactions.

Then add the influence on the financial sector dependant more and more on real estate.

Then add construction which is heavily dependent on real estate.

We are talking about hundreds of thousands of jobs, plus the knock-on effect. All against a market that is very long in the tooth, particularly in Condos discussed here last week.

So tread softly, because if real estate rolls over, finding new tax revenue anywhere will be difficult.

What about a Blog Tax ? Say $1 a comment ?

#97 Linda on 09.20.20 at 6:37 pm

#75 ‘Howard’ – I’m afraid ideals will not apply. The intent is to increase tax revenue, to pay for all the government largesse like CERB & potentially UBI. The implementation of capital gains taxation on housing will not see reductions in other forms of tax revenue. Historic, ongoing deficit, remember? That needs $ to pay it back & there housing sits, ripe for the plucking. Though I’m probably the naive one thinking the money would be used to pay down the debt.

#98 joblo on 09.20.20 at 6:41 pm

Not a worry for Alberta, under this Federal guberment home prices will never go up.

#99 FedUP on 09.20.20 at 6:43 pm

Long time reader (love the blog) first time poster.
I find this whole thing unbelievable. Yes, it is just speculation atm about how we will all pay for all the irresponsible spending of this government, but it certainly looks like we will pay in one way or another, and our children and grandchildren will pay. However, why is the view and the conversation about lesser evils? Why do we talk about what would hurt ‘us’ the least? Why don’t we talk about and why don’t we hold this government accountable for its idiotic behaviour? Is government spending taboo? Why are more taxes ALWAYS the answer? Why do we bend over and hope the punishment to come won’t be too harsh, instead of calling and emailing our MP’s daily, demanding they curtail spending?
I find Canadians’ attitude to be unbelievable….we look at who else (we envy for whatever reason) can be taxed more? Don’t you feel you are taxed enough already? Are we really looking at what else we can tax? How about the air we breathe? Maybe we should tax people who live in the mountains more because they enjoy cleaner air than the plebes who live in congested urban areas? After all, ‘they’ didn’t do anything special to enjoy that pure air, right? They are taking advantage of all the work and sacrifices made by those in the cities-those who pay for all the ‘green opportunities’. If that sounds insane, please give your head a shake and ask yourself: why do YOU have to pay more tax of any kind, instead of demanding THEY reduce idiotic spending?
Just unbelievable! When will you have enough redistribution via taxation?

#100 cuke and tomato picker on 09.20.20 at 6:43 pm

I do not think the government will put a capital gains tax on your home. However they will have to come up with ways to tax everything else to pay for cerb, ei,gst,income
assistance, rental supplement and other cash to encourage lazyness etc. We reward the idle.

#101 not 1st on 09.20.20 at 6:58 pm

So a stock portfolio will be immune?

At least the valuation would be hard to pin down unlike a sitting duck like RE.

#102 Flop... on 09.20.20 at 6:58 pm

#83 Stealth on 09.20.20 at 6:01 pm
Hi Garth,

Which Defense shall we seek?

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

I highly recommend using Insanity…

M46BC

#103 BE GLAD YOU STAYED ON THE SIDELINES on 09.20.20 at 7:05 pm

YUP. GONNA BE A LOT OF UNHAPPY BOOMERS AND MILLENNIALS AFTER T2 AND HIS GOVT GANG REACH IN AND FEAST ON THE SPOILS AND RICHES OF THE MASSES. SHAMEFUL AND YET SO PREDICTABLE.

#104 Nonplused on 09.20.20 at 7:06 pm

So, on to other topic, namely 2020.

It seems every day the news get worse. First covid, locusts in Africa, hurricanes, riots in the cities and arsonists in the forests, mail in ballots, ricin in the white house mail, etc., and now Ruth Bader Ginsburg. That was a name nobody was throwing around much just a week ago. Now it is all the headlines.

I don’t have any particular opinions on how RBG did a a justice, all reports are she was well respected on both sides of the aisle. RIP RBG.

But the news is going to be all about her seat on the supreme court 24/7 from now on. Covid will be all but forgotten. The Biden side is lining up to say that you can’t appoint a supreme court justice in an election year. The Trump side is lining up to say the current administration continues to govern and conduct the business of government until inauguration day. Constitutionally the Trump side is correct but the wailing a gnashing of teeth on the Biden side will be extreme.

The smart money is on Trump nominating Amy Coney Barrett next week and the senate moving to a quick vote. I don’t know much about Amy other than she has recently been through a confirmation hearing. And she’s Catholic, which is seen as a downside. I don’t know why though, RBG was Jewish and nobody held that against her. People have religions. It seems to be part of our makeup. If Dog did not exist, we would have to invent him.

Of course it is in Trump’s best interest to fill the seat before the results of the election goes to the supreme court, which it likely will. Can you imagine after a contested election the supreme court comes back split 4-4? What happens then? Does the constitution say anything about what the process then becomes? Does the senate decide? Which senate, the outgoing one or the incoming one? Will the left riot if Trump is declared the winner? (Well I guess we know the answer to that one.)

2020 just keeps getting worse and worse and worse. What’s next? War with Iran? Oh I shouldn’t have said that…..

#105 Wackedbc BC on 09.20.20 at 7:08 pm

The millennials cheer for increased carbon taxes, which have pushed our food prices to double, and back Trudeau’s obscene spending. Their UBI scheme will have them all in poverty eventually.

I plan to spend or give away, every last cent before I die. From Costa Rica, God willing. Clock is ticking.

#106 Yukon Elvis on 09.20.20 at 7:10 pm

#95 Old Ron on 09.20.20 at 6:36 pm

What about a Blog Tax ? Say $1 a comment ?
…………………….

I’d be ok with that. Garth could afford it.

#107 I’m stupid on 09.20.20 at 7:16 pm

Let’s do some math…

How would taxing houses work.

If you purchase a home for 800k and spend 800k to build new and sell for 2million.

1.6 spent.

Tax on 1.2 million= 600k
2million-600k= 1.4 million a loss of 200k

That doesn’t work… what we’ll have is a city of rundown homes.

Let’s do something else. Buy a home for 950 with 10% down finance for 25years at 4% average total interest is 500k total is about 1.5 million sell for 2million pay tax on 1 million break even.

That would be political suicide. What should really be done is increase property tax. A secondary property tax that goes to the federal government based on property value. This way it becomes another monthly expense to home ownership and you don’t need to worry about voters with pitch forks at the gate. My guess is that is what’s going to happen, it will start with it being for Covid and remain in place forever and increased every time the govt need cash.

#108 Nonplused on 09.20.20 at 7:21 pm

“How does it differ from selling financial assets to fund retirement? They were also bought with after-tax cash. I think this is what many question. – Garth”

Because financial assets kick off cash (hopefully), are businesses, and are not consumer items. All a house does is keep the rain off your head. I am starting to think you might be thinking taxing principal residences is a good idea. It’s not. Well they are taxed already, but that is the jurisdiction of the municipalities.

If we Canadians want to develop a thriving economy that doesn’t depend on oil and tree exports, we need to follow the Ireland model. That means less tax, not more. Fiddling with what gets taxed and what doesn’t won’t move the needle one little bit. The only number that matters is total taxes as a percent of GDP. But push that number much above 25% and you kill the golden goose. And it doesn’t matter if you are using that extra tax revenue for UBI, in fact that kills the goose faster because nobody needs to work. Without work, there is no wealth to distribute, only Monopoly money.

#109 Nonplused on 09.20.20 at 7:27 pm

#5 Paul on 09.20.20 at 1:58 pm
So if you buy for $1,5 Million and sell for $1.2 Million you get a $300 thousand deduction.

You wish. – Garth

———————-

But that is how capital gains taxes work. Not against income mind you, but you can deduct your capital losses from your capital gains. For 7 years last I checked.

Less imputed rent and renos? – Garth

#110 Quintilian on 09.20.20 at 7:28 pm

The Real Estate Fairness Plan:

1)All numbered companies must within 30 days declare the beneficiaries.

2)All law firms listed as registered offices of said numbered companies will have their license suspended, if within 45 days do not report the said companies’ true directors.

3)Every MP and MLA or Civic Politicians who have been in in office since the run up in prices, must report their real estate holdings beyond one residence.

4)Local and Foreign investors of real estate must prove income consistent with assets.

5)If above not met, confiscate, sell assets and proceeds go to homelessness, and drug problems.

6)After due process deportation.

#111 Nonplused on 09.20.20 at 7:35 pm

#48 Brian Ripley

Normally you are so smart about things.

An APT would simply shut down the TSE.

We are at peak tax.

#112 DON on 09.20.20 at 7:38 pm

The bulk of net worth is in real estate equity and you don’t think the government will come a knockin because they will lose votes? I get it, but things change.

Likely, they will wait till the next bad news period comes along and house taxes will be acceptable given the alternatives. Unemployment, could spike again in the winter happering our recovery then things cascade.

On another subject. Smokes gone…fresh air is back…suns out and covid is only on the news. Now we wait for the roller coaster ride…hopefully it is just an easy quick economic ride.

My gut says Yikes!

Herdonomics is the key.

#113 justdeleteitifyoudontlikeit on 09.20.20 at 7:44 pm

A modest proposal:

If house prices go up 20% in a year, and Statistics Canada doesn’t want to call that inflation, it should be added to GDP.

One or the other.

#114 Nonplused on 09.20.20 at 7:49 pm

One final post before I sign off and do some serious drinking.

I cannot believe how pessimistic so many of the commenters have become. And Garth too I would say. The conversation is almost become totally about who else we can tax for what, as if we already don’t have high tax rates.

Folks, we are already at peak tax and we all pay the same effective tax rate. When you propose something so ridiculous as increasing the taxes on your parent’s home, you pay the tax through reduced inheritance or having to fund their stay in the old age home.

And it is extremely pessimistic. It is like throwing in the towel and saying because I am currently running the forklift I will never manage the lumber yard. Young people these days expect to be born on the finish line.

Remember, any punitive taxes you millennials vote in now will still be there when you rise up the ranks. You are shooting yourself in the foot.

#115 Billy Buoy on 09.20.20 at 7:50 pm

I’d say taxing lotto winnings now is a lock for a new tax to be introduced.

Thoughts?

#116 Ed on 09.20.20 at 7:52 pm

Seems to me raise the GST to 7% on everything including houses. That should ensure OToole is PM.

#117 baloney Sandwitch on 09.20.20 at 8:00 pm

The realtors and the banks are not going to like this. T2 is making powerful enemies. Watch out for FUD bombs and shrieking.

#118 willworkforpickles on 09.20.20 at 8:03 pm

And after the next voting triumph – a victory parade perhaps.
Complete with marching band, dancing queens with twirling batons, bass drum and cymbals…all the clowns in parliament, our glorious leader front and center, black face with a rubber ball on his nose…then – a limo to follow, loudspeakers blasting – victory to all – with a float of clapping seals taking up the rear….

#119 El presidente on 09.20.20 at 8:04 pm

#101 Flop… on 09.20.20 at 6:58 pm
#83 Stealth on 09.20.20 at 6:01 pm
Hi Garth,

Which Defense shall we seek?

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

I highly recommend using Insanity…

M46BC
….

It’s not all it’s cracked up to be….let me tell ya….

#120 John on 09.20.20 at 8:07 pm

All this can be solved very easy. Make the following law:
1. All mortgages are at a minimum of 5% regardless where the money come from: any bank, any country.
2. If the bank gives the mortgages for 1.7% then the rest (3.3%) goes to the government in form of taxes.
That’s it. This will stop the houses to go indefinitely up, we won’t have overly indebted individuals, and even the government will get a piece of the pie by taxing the poor schmucks who are house horny! Hooray!

#121 Stone on 09.20.20 at 8:07 pm

All this speculation is pointless. Wait till September 23rd and hear what the facts and reality are. Plan accordingly thereafter.

Instead, please spend your time and energy feeding my dividends. They’re really hungry. Especially Sara #80 in regards to your comment that “homes are emotional”. Just for that, you should double your contribution to my dividends.

“Homes are emotional”. I can’t stop LMAO!

#122 Dog Breath on 09.20.20 at 8:08 pm

#22 Millennial Realist on 09.20.20 at 2:46 pm

“Be part of the change. Or be run over by it.”

———————————–

This what they said just before the Communist revolution in Russia!

#123 Millennial Surrealist on 09.20.20 at 8:09 pm

We’re taking over the planet boomers……step aside…you’ve done enough damage… to well everything….

https://moderndiplomacy.eu/2020/09/20/nearly-9-in-10-people-globally-want-a-more-sustainable-and-equitable-world-post-covid-19/

#124 The Woosh on 09.20.20 at 8:09 pm

Sara on 09.20.20 at 5:25 pm
@#70. It’s not just a matter of logic. Homes are emotional. Stocks/ETFs/GIC’s, etc are not. There needs to be a way to make the taxing of home equity gains somewhat palatable to “the 70%” while simultaneously raising tax revenue and making homes more affordable for younger Canadians.

—————————————

What? Stocks/ETFs/GIC’s are emotional. I beg to differ. When I lose money, I feel sad and depressed. When I make money, happy and excited. When the markets are flat, I feel numb. When dividends are cut, I want to lash out at the world. You see…emotional. Was it that hard?

As for making taxes more palatable…maybe you can ask the CRA to send someone over to give you a hug and say: there, there. That’s a good serf!

#125 Kaleycat on 09.20.20 at 8:12 pm

So the way I read these numbers: 16.4% of Alberta’s GDP is based on oil and gas. But guess what folks, 17.6% of the BC economy is based on housing. We all know how much it hurts Alberta when oil prices dive, obviously the provincial government in BC can’t allow B.C. housing to do the same thing. Maybe that explains the new home ownership $$ etc – house pimping by government.

https://www.statista.com/statistics/608354/gdp-distribution-of-alberta-canada-by-industry/
https://www.statista.com/statistics/608359/gdp-distribution-of-british-columbia-canada-by-industry/

Stephen Jarislowsky once proposed a declining taxation level on principle residences over time of ownership to prevent taxation on inflation. That way people who live in their homes for 30 years would probably owe nothing as the increased value of their home is due to inflation. The rest of us might want to consider putting the house in the company name, open up our home office, write off operating expenses, add improvements to our capital account, and charge ourselves a rent that covers the mortgage. Oh, and then write off the mortgage interest the company paid as an investment expense, of course.

#126 R on 09.20.20 at 8:13 pm

I think it would be unfair to raise income taxes, investment taxes, or further compromise the TFSAs while giving home owners a pass. Full disclosure, I am also a home owner

#127 Kaleycat on 09.20.20 at 8:15 pm

Stephen Jarislowsky once proposed a declining taxation level on principle residences over time of ownership to prevent taxation on inflation. That way people who live in their homes for 30 years would probably owe nothing as the increased value of their home is due to inflation. The rest of us might want to consider putting the house in the company name, open up our home office, write off operating expenses, add improvements to our capital account, and charge ourselves a rent that covers the mortgage. Oh, and then write off the mortgage interest the company paid as an investment expense, of course.

#128 Linda on 09.20.20 at 8:16 pm

Garth makes a valid point when he states that both forms of assets – investments vs. housing – are purchased in after tax dollars. However, there is a distinct difference between the two types which I think needs to be accounted for when applying a capital gains tax (or whatever it may be called).

A house differs from a stock or bond in that a stock/bond does not require maintenance. Or is assessed property taxes/land transfer taxes. You don’t live in a stock/bond. You do not raise a family in it. School catchment areas, proximity to transit, work or public amenities are not a consideration when purchasing or selling a stock/bond. You don’t pay utilities on a stock/bond. Home insurance doesn’t apply. My point being that whatever taxation is applied there must be some provision made to ensure that one doesn’t pay more tax to own a home than one would pay to own a stock or bond. Some way of writing down expenses or losses. Leveling the playing field has to work both ways.

#129 SoggyShorts on 09.20.20 at 8:21 pm

#106 I’m stupid on 09.20.20 at 7:16 pm
Let’s do some math…
How would taxing houses work.
If you purchase a home for 800k and spend 800k to build new and sell for 2million.
1.6 spent.
Tax on 1.2 million= 600k
2million-600k= 1.4 million a loss of 200k

***************************
If you are buying for 800, renoing for 800k and selling for 2m you sound a lot more like business than a homeowner to me, so that 800K reno should be an expense meaning your profit was just 400K of which Justin gets half.

——————————-
#106 I’m stupid on 09.20.20 at 7:16 pm
Let’s do something else. Buy a home for 950 with 10% down finance for 25years at 4% average total interest is 500k total is about 1.5 million sell for 2million pay tax on 1 million break even.
*****************************
The idea is to make a house a home and not an investment, right? if so breaking even would also be the goal, no?
You’re also assuming 100% capital gains inclusion rate, rather than the 50% currently on other cap gains, or any amount on a sliding scale.

#130 The Woosh on 09.20.20 at 8:23 pm

#94 dr talc on 09.20.20 at 6:35 pm
How does it differ from selling financial assets to fund retirement? They were also bought with after-tax cash. I think this is what many question. – Garth

The difference is the amortization schedule, buy a house for 1 million, after the 25 yr amortization schedule you’ve paid about 2 million
It’s a lot of things, but not profit. Profit is on the lender’s end.

————————————————

You’re dating yourself. Rates are nowhere near paying that much in interest. Try again. Current rates makes the interest paid a pittance even when it’s a million dollar house.

#131 willworkforpickles on 09.20.20 at 8:30 pm

#103 Nonplused
“2020 just keeps getting worse and worse and worse. What’s next? War with Iran? Oh I shouldn’t have said that…..”
……………………………………………………………………………………………………………….

But you can…wait until the stuffing and feathers settle after the US election.
Governments have gone to war forever it seems to boost economic production at home and to switch the focus of the masses away from domestic problems.

#132 Trumpada on 09.20.20 at 8:36 pm

#Wexit #Now
Calgary needs a gleeming new 80 story Trump Tower.
And lower taxes, much lower.

#133 Dr V on 09.20.20 at 8:36 pm

64/65 MF

If you don’t run it as a business eventually it goes broke.

The better answer is to simply re-invest the profits (or
pay down debt from the times the budget didn’t “balance itself”).

#134 I’m stupid on 09.20.20 at 8:38 pm

#128 SoggyShorts on 09.20.20 at 8:21 pm

The point wasn’t the numbers… they were just rough estimated. I understand your point about a home being a home. My point was to show that taxing homes becomes very fuzzy unless the government intends on placing tax on tax. I don’t put it past them trying to double tax. It just becomes very political to do it that way. All an opposing leader needs to do is say they’ll remove the tax and you’ll get a new govt.

Putting a user tax in place on a yearly or monthly basis gets more revenue without the political and tax mess.

#135 Sara on 09.20.20 at 8:40 pm

#117 Stone

Ha Ha! I knew someone nit-picky would point out my lazy wording, though I thought I had been sufficiently succinct in my overall message. Perhaps not. To be clearer, hopefully, what I meant was that Canadians are emotional about home ownership. Taxing the increase in value of one’s private residence is not equivalent on an emotional level to taxing capital gains of one’s stock investments. People get more upset at the idea of taxing the capital gains of their personal, private residence than their stocks. See what I meant now? “Houses are emotional”.

#136 The Woosh on 09.20.20 at 8:42 pm

Linda on 09.20.20 at 8:16 pm
Garth makes a valid point when he states that both forms of assets – investments vs. housing – are purchased in after tax dollars. However, there is a distinct difference between the two types which I think needs to be accounted for when applying a capital gains tax (or whatever it may be called).

A house differs from a stock or bond in that a stock/bond does not require maintenance. Or is assessed property taxes/land transfer taxes. You don’t live in a stock/bond. You do not raise a family in it. School catchment areas, proximity to transit, work or public amenities are not a consideration when purchasing or selling a stock/bond. You don’t pay utilities on a stock/bond. Home insurance doesn’t apply. My point being that whatever taxation is applied there must be some provision made to ensure that one doesn’t pay more tax to own a home than one would pay to own a stock or bond. Some way of writing down expenses or losses. Leveling the playing field has to work both ways.

——————————————

Garth…you should add the ability to include emojis. This one deserves a facepalm. Folks, stop associating emotions to home ownership. You do realize that real estate agents call your “homes” products.

#137 Nonplused on 09.20.20 at 8:43 pm

#108 Nonplused on 09.20.20 at 7:27 pm
#5 Paul on 09.20.20 at 1:58 pm
So if you buy for $1,5 Million and sell for $1.2 Million you get a $300 thousand deduction.

You wish. – Garth

———————-

But that is how capital gains taxes work. Not against income mind you, but you can deduct your capital losses from your capital gains. For 7 years last I checked.

Less imputed rent and renos? – Garth

———————————–

Well sure Garth, but you have to deduct mortgage interest from imputed rent. After a while the spreadsheet is big enough and contains too many fudge factors. Businesses can deduct interest expenses. You can’t have imputed rent without deducting interest. A landlord gets to do it when he/she files his/her tax return.

After interest, taxes, realty fees, maintenance, and now land transfer taxes, hardly anybody really makes any money on a house that they live in. And if they want to tax whatever appreciation there may be after inflation, all that has to be included. If it is a business it must be treated as a business. Heck you should be able to deduct the money you pay the neighbor’s kid to shovel the sidewalk like a rental owner does.

#138 IHCTD9 on 09.20.20 at 8:51 pm

#99 cuke and tomato picker on 09.20.20 at 6:43 pm
I do not think the government will put a capital gains tax on your home. However they will have to come up with ways to tax everything else to pay for cerb, ei,gst,income
assistance, rental supplement and other cash to encourage lazyness etc. We reward the idle.
———-

It’s almost impossible to think that there is some tax scheme that will pay for the kind of spending Trudeau is doing. There’s what – 18 million people with a job in the this country? We’ve got 2 Trillion F+P total debt now, and Trudeau is just going nuts spending even more.

There just isn’t enough economy in Canada for this kind of spending, and to complicate matters worse, Canadians seem to love it.

So it will continue until the bond market says they’re not interested, or inflation rises from the dead. By then the total debt will be an epic abomination that we can barely afford to even service – forget about paying down.

I don’t know where we’d go from there, but the IMF will probably be involved.

#139 X on 09.20.20 at 8:59 pm

Either way, Trudeau has spent a ridiculous sum of money and needs new ways to squeeze tax money out of those who have money. Whether or not new initiatives are intorduced or not, more taxation is coming.

How they pitch or spin it who knows.

If a UBI is introduced I know I will be paying more than I get back regardless.

#140 SoggyShorts on 09.20.20 at 8:59 pm

#127 Linda on 09.20.20 at 8:16 pm
A house differs from a stock or bond in that a stock/bond does not require maintenance [or other expenses]
*******************
Yeah, homes require maintenence, prop taxes etc, but they also give you shelter.

So if you want to write off those expenses against the cap gains on your house you should also have to include $x,xxx per month in “gains” equal to what rent would have been.

Now we’re getting so complicated the government would spend more on enforcement and figuring it out than they would collect.

So, let’s keep it simple:
No write-offs of any kind on your house, BUT a lower inclusion rate on your capital gains(possibly on a scale based on years occcupied) AND/OR an allowance on the first XX of gains in your lifetime.

#141 DON on 09.20.20 at 9:02 pm

03 Nonplused on 09.20.20 at 7:06 pm
So, on to other topic, namely 2020.

It seems every day the news get worse….

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

More likely a stand off/skirmish over Tawain. Can’t wreck Trump’s peace deal in the middle east. At least for the next 7 weeks.

White House Mail. I wonder if/how the Trump team will use it in an attempt to get Americans to rally behind him? Yah…first thought when I heard the news.

#142 Abolitionist on 09.20.20 at 9:07 pm

Liberal suicide – “GeT beHinD iT Or GEt ruN oVer BY iT”?

https://www.firstthings.com/article/2020/10/suicide-of-the-liberals

#143 Dr V on 09.20.20 at 9:12 pm

1144 Billy B – lottery winnings are simply re-distributed after tax dollars so they are already fully taxed.

Of course that wont stop the government……

#144 Huh? on 09.20.20 at 9:13 pm

You are better off to rent than buy but people who bought made too much and deserve to be taxed more.

Got it.

#145 Apocalypse2020 on 09.20.20 at 9:13 pm

45 Days to Global Catastrophe.

PREPARE

#146 Apocalypse2020 on 09.20.20 at 9:25 pm

45 Days to Global Catastrophe.

PREPARE

……..

Perhaps not that long for you sir – RUN,GARTH,RUN!!

DISASTER HEADING FOR LUNENBURG!

“100-ft tall waves could form near Atlantic Canada as Teddy approaches”

https://www.theweathernetwork.com/sx/news/article/hurricane-teddy-tracking-toward-atlantic-canada-nova-scotia-landfall-likely

HEAD WEST NOW GARTH!

#147 DownToFinance on 09.20.20 at 9:26 pm

Garth, majority of the electorate are homeowners as you pointed out previously so it would be political suicide to propose any form of end user tax on housing. Never gonna happen in Canada. If the liberals proposed a housing tax they would be handing an election to the Conservatives on a silver platter.

#148 Dr V on 09.20.20 at 9:31 pm

Hmmmm.……… lots of good comments……..another great post Garth…….

So how about a lower inclusion rate on the gains? As you cannot sell part of your PR in the same manner you can sell only part of your investment portfolio, it could be a huge hit for a long-term owner if you had to realize 50% all in one tax year. The sliding scale would
help, but then the owners with potentially the biggest
gains pay nothing. So from the tax collector’s
standpoint (Garth, weren’t you that guy once?) that is
a big zero. Maybe a minimum inclusion could apply as well.

This is like UBI for me. Not necessarily against the concept if you can show me how the numbers would
work.

Yes, I own a house – mortgage free for 11 years. Soon to be work free!

#149 Sara on 09.20.20 at 9:34 pm

@Woosh #123, ” As for making taxes more palatable…maybe you can ask the CRA to send someone over to give you a hug and say: there, there. That’s a good serf!”

It’s weird how conversations go “woosh” around here.

To reiterate, it will be a struggle to make capital gains taxes on housing palatable to many Canadians, and government might try to mitigate the effect of such tax on long-term home owners in particular if it hopes to retain their votes.

I wasn’t referring to myself, just making a statement. So why are you suggesting I give CRA a hug exactly?

#150 WiseGuy on 09.20.20 at 9:38 pm

The government really needs to clamp down on corporations whose soul purpose is real estate. My friend owns 4 homes in a corporation, he buys new furniture for his own home and writes it off on the rental properties. Renovations on his own property and writes it off the income of the others. Wife drives a car that also is written off in the corporation. My colleague is the same and owns 3 properties and does much the same.

I’d say this is fraud, but in Canada, it’s legal!

#151 crowdedelevatorfartz on 09.20.20 at 9:38 pm

@#95 Old Ron.
“What about a Blog Tax ? Say $1 a comment ?”

++++

I pay enough taxes. The Buck a blog would bankrupt me and make Ponzie a happy happy man.

#152 45north on 09.20.20 at 9:44 pm

“Your latest blog entry links to a site, https://www.ubiworks.ca/howtopay, which promotes the idea of a land value tax,” writes Alex. “I have always thought it was unfair that investing in securities is heavily taxed, but investing in real estate is not. I consider anyone who buys a home to be an investor, since I believe the main reason someone chooses to buy a home over renting one is the prospect of untaxed land value and property value appreciation.

two years ago I helped a candidate for municipal office ( Riley Brockington) canvas. I’d say of the single family homes, 1 in 2 answered the door. Townhouses about the same. In apartment buildings I’d say 1 in 20. The point is people living in single family homes are easy to reach. They’d be easy to organize. I’m pretty sure the Liberal Party of Canada knows that. As you say capping the untaxed portion at a quarter million might be enough to sneak it in but it might not. Key word is sneak. The other thing is the higher the cap the less money you get. And property tax is a provincial jurisdiction. Property assessment is a provincial jurisdiction. How does the Federal Government impose a capital tax on property and not interfere with provincial responsibilities?

A tax on capital gains of property is like the card game blackjack. Ask one too many times and you’re busted.

#153 Blacksheep on 09.20.20 at 9:45 pm

John,

“IMO this is just wishful thinking. There’s NO WAY a government will introduce a tax on the primary residence as long as there are more home owners than renters.”

“This would be political suicide.”

“Taxing the rich” works because most of the people are not rich. No government will start eating from the nest egg of 70% of the population and still hope to get re-elected.”
—————————
What John said, not…a…chance.

#154 crowdedelevatorfartz on 09.20.20 at 9:45 pm

I just finished reading Mary Trumps’ book Too Much and Never Enough.

Confirms everything I thought about Trump.

The dysfunctional Trump family with the empathy of Mar-a-Lago alligators sizing a puppy up for dinner.

#155 Ace Goodheart on 09.20.20 at 9:45 pm

I can’t see T2 taxing principal residences in any meaningful way.

In most of Canada, people own their houses. Most of Canada doesn’t have Toronto and Vancouver house prices, so it is possible to get a mortgage, work at a job, and in 25 years’ time, you have a paid for house.

Many people do it, and have done it. In your average Ontario small town, the streets are full of old timers who did exactly that, and young folks who are just starting out on that journey.

20 somethings, who don’t want to work, want the world handed to them on a platter, and who all want to live in Toronto’s most Tony ‘hoods, in four bedroom houses with garages and back yards, are not going to get that, by taxing other people’s houses away from them. And I think they know that.

The other problem with a house tax is this: Houses are occupied mostly by families. Mom, Dad (or Dad, Dad, Mom, Mom or some other combination of genderless people) and a bunch of little kids.

So you put a heavy house tax on, and start evicting people.

People who have already lost their jobs due to COVID and are just hanging on, now having their houses taken, by a government that wants to appease twenty year old stoner kids who spend their days getting high and having casual sex with each other on Tinder.

Imagine the headlines, once these families start showing up in the shelter system.

The Federal government kicked us out of our house! Our children are homeless! Our family is destitute!

Good luck with that. The Libs will never win another election with that one.

#156 John on 09.20.20 at 9:50 pm

#127 Linda on 09.20.20 at 8:16 pm

Yes, but the person who owns stocks or bonds also needs a place to live in. For example I don’t own a house, I don’t pay taxes for it, I do not have to spend money on renos and maintanence. But I have to pay rent to be able to have a roof over my head! And now the question: who pays more money, you with the taxes and maintanence of your house or me with my 4000$ rent per month to be able to live in a similar house?
The primary residences should be taxed the same way as the other types of investment are, since a house is not just a “place to live” anymore. It’s an investment, and it has been for a very long time.

#157 Smokinggal on 09.20.20 at 9:52 pm

Raise rates to 6% and this housing shit will sort itself out, and the fixed income folks can get off the catfood….lol..so simple…

#158 Ponzius Pilatus on 09.20.20 at 9:55 pm

Been the Richmond IKEA today.
Wow. Jam-packed, parking lot full, 1/2 hour to get in, 1/2 hour to check out.
Last year there was talk about closing shop.
That’s why I never make prediction, especially if it involves the future and humans.
Masks mandatory, TN.
And, assembly still required.

#159 Sara on 09.20.20 at 9:57 pm

Investors are pulling out, but young, hormonal home buyers keep coming into the market. FOMO is intense. For the first time in a recent years, insured mortgage debt growth has risen, whereas uninsured mortgage debt has done the opposite.

#160 Ace R on 09.20.20 at 9:57 pm

I felt this coming. This year the average home owner in the GTA was making over $200 every single day just because they own a house. If just by owning a house you’re making over $70,000 a year equity how can the government not see an opportunity to tax. I know someone who just bought last year and sold last month making $80,000 after all was said and done. And now her new house is up for sale, an attempt to do it all over again.

#161 SWL on 09.20.20 at 10:04 pm

“Now this is pure speculation, since the prime minister did not accept my generous offer to proof read and fact-check the speech to be delivered in Parliament.”
Brilliant jab Garth. Not much he or any one else in the Liberal party can say against that

Covid sure has sucked any rational thinking from most peoples brains. Scary times and things are happening fast. Not looking forward to this new normal normalizing, for the next new normal is really gonna suck

UBI should only be dished out after a history lesson on its failures around the world. Can’t happen here… Right?

#162 IHCTD9 on 09.20.20 at 10:05 pm

#129 The Woosh on 09.20.20 at 8:23 pm
#94 dr talc on 09.20.20 at 6:35 pm
How does it differ from selling financial assets to fund retirement? They were also bought with after-tax cash. I think this is what many question. – Garth

The difference is the amortization schedule, buy a house for 1 million, after the 25 yr amortization schedule you’ve paid about 2 million
It’s a lot of things, but not profit. Profit is on the lender’s end.

————————————————

You’re dating yourself. Rates are nowhere near paying that much in interest. Try again. Current rates makes the interest paid a pittance even when it’s a million dollar house.
——

It’s lower now, but not a pittance. Over 400k in interest at 3% for 25 years on a million dollar house.

#163 Ponzius Pilatus on 09.20.20 at 10:18 pm

#150 crowdedelevatorfartz on 09.20.20 at 9:38 pm
@#95 Old Ron.
“What about a Blog Tax ? Say $1 a comment ?”

++++

I pay enough taxes. The Buck a blog would bankrupt me and make Ponzie a happy happy man.
————–
You can relax.
Nonplussed is the new blather mouth of the month.

#164 IHCTD9 on 09.20.20 at 10:18 pm

#146 DownToFinance on 09.20.20 at 9:26 pm
Garth, majority of the electorate are homeowners as you pointed out previously so it would be political suicide to propose any form of end user tax on housing. Never gonna happen in Canada. If the liberals proposed a housing tax they would be handing an election to the Conservatives on a silver platter
——

I own a house, and I’d support it – if it were done right, with a time limit. This way, home buyers intending to use the house for a home – pay no tax, but those trying to make money flipping them find it unprofitable.

I’m totally not down for a universal PRCG tax for all, few would be, and that would definitely be political suicide.

#165 Stone on 09.20.20 at 10:22 pm

#158 Sara on 09.20.20 at 9:57 pm
Investors are pulling out, but young, hormonal home buyers keep coming into the market. FOMO is intense. For the first time in a recent years, insured mortgage debt growth has risen, whereas uninsured mortgage debt has done the opposite.

———

Yeah, those investors should still wear a condom. No comment on the young, hormonal homebuyers and what they’re doing in the market.

Thanks Sara. You have a way with words.

#166 Westcdn on 09.20.20 at 10:23 pm

I say let property tax run wild – not that I want it but I will survive. Nothing like common pain to fight. Try it Nenshi and see what happens – I am prepared. One of the few things we are all in it together- I believe in individuals for better or worse and our ability to learn.

As you may have guessed, I don’t like big government.

#167 John on 09.20.20 at 10:29 pm

#149 WiseGuy on 09.20.20 at 9:38 pm

This is legal in most countries. Your friend is a smart guy! He knows how to take advantage of the system and that’s the smart thing to do. Myself went to work as a contractor (software developer) just to be able to write off as much as possible on the corp. More hassle but worth it. Now getting more money and paying less taxes. The beauty of it, everything is legal!
I gave a very nice example to one of my friends. Told him: “how much of your pre-tax money do you spend on a computer that costs 3000$?”, he said “I don’t know…”
I told him: “On the initial price you have to pay 13% in HST, that would be 3000 + 13% = 3390$ in after-tax money.. and if your average income tax rate is 34%, that would be about 4542$ in pre-tax money. While me, buying the same laptop on my corporation, I pay 3000$”. You should have seen his face…

#168 Ponzius Pilatus on 09.20.20 at 10:29 pm

#150 crowdedelevatorfartz on 09.20.20 at 9:38 pm
@#95 Old Ron.
“What about a Blog Tax ? Say $1 a comment ?”

++++

I pay enough taxes. The Buck a blog would bankrupt me and make Ponzie a happy happy man.
—————-
Too much taxes?
I assume you’re single.
You’re lucky to live in Canada.
In good old Austria, single people pay a premium.
But, to compensate, booze is much cheaper.

#169 Forune500 on 09.20.20 at 10:32 pm

I’m trying to get worked up and angry with you Garth but this seems too reasonable to me. I’ve always thought this is part of the reason homes have become treated as investments. It seems … well … dare I say it … fair.

#170 Wisdom Seeker YYC on 09.20.20 at 10:33 pm

Hi everyone! It’s probably a bit of an odd posting … please be gentle with me … I’d really would like to get some feedback from you … Thanks in advance!

I just called my rental company this week to find out what the new price would be for a 12 month lease and was told it would go up (in total about $60 to $1,389 including heat and water). I somewhat expected that but hoped as Calgary’s rental market has changed quite a bit that they would actually change their strategy. It’s one of those national rental companies and their business model seems to be based on “graduating” renters up over several years. So you get in with a nice incentive and then every year you end up with an increase, which is why lots of people seem to move on after the first or second year and I am considered a long-term tenant after only 4 years. I can’t really understand their business model, as in my calculation if I move out, they lose money, get someone in for about $200 cheaper (I asked others what they pay), have to paint or renovate the place (it’s still nice but dated) and then have to try to graduate them again to make up the loss. Wouldn’t it be smarter and less leaving a very bad taste for people every year (it also sort of discriminating) to just value long-term tenants and try to keep them especially in the current market?

They may offer me a $20 discount with some haggling (it’s a yearly game of negotiation but that’s about it). As much as I hate moving, when I checked Rent Faster I was blown away how much apartments are available. I can easily save between $200-400 per month for comparably nice apartments in good locations with lots of options to choose from, so I think this year it’s hard to justify staying.

I checked Condos as well, but although prices have come down quite a bit, due to the economy here and job insecurity down the road, I hesitate to plunge into the market right now. I could afford a Condo but when comparing rent-buy options, the difference is not that significant and the risks of buying are much higher. I also lose the flexibility as selling Condos is currently not easy, so likely would lose money and face all the transaction fees on top if I had to move.

I even thought about going a size smaller apartment to accelerate my savings potential to about 50% of my net income and if I’d lose my job this would help to cope as well but are undecided as I don’t want to feel too depressed and confined during the long winter and another possible second wave of Covid with being stuck WFH in a smaller space.

I am scared to be honest as although all looks calm right now, it feels like the calm before the storm. Somehow, many people here still have the attitude that it will all pass and they can continue as before the oil prices crashed down. I can’t see it that way and see a lot of risks that have not boiled down yet. This year was tough from the beginning, lots of work stress, Covid scares, feeling unwell (achy) and generally fending on my own. I felt tremendously isolated and really struggle with this situation. The smoke last week from the fire zone in Oregon/California and being on vacation stuck at home has not helped either.

It’s not easy for me to move jobs or relocate, neither my age nor my experience are all too helpful (although I have lots of education and experience from the “old world”, it’s all dated and not practically used for years, so my best option seems to try my best to keep my job and to maybe pick up some skills in a niche area, which would provide additional opportunities should I lose my job. That niche thing has been elusive to me for years though. What I do for a living, is well-paid with lots of benefits and my coworkers are great. I am more of an introvert and have a hard time with networking, not street-smart at all lol, and seem to be one of those people that just don’t have enough confidence to pull risky stuff off. I also got traumatized years ago and since then struggled with depression and anxiety.

– If you were me, what would you do? Move to a smaller apartment and boost savings?

– What are skills I could pick up that could make a generalist business support person more competitive or give an edge considering that I am 50+?

– I estimate to need 6 more “good” years to reach my lower limit of retirement savings I could reasonably comfortable live with when I reach 65 (doubting that I keep my job that long .. so the time horizon is still more than about a decade), what would be a smart to invest in considering this abnormal market? I am eyeing VRE, as I don’t have REITS in my portfolio yet. Did I mention I am a lousy investor as well, lol?

Kind greetings from YYC

#171 Shirl Clarts on 09.20.20 at 10:49 pm

#11 Millennial Surrealist on 09.20.20 at 2:17 pm
Sept. 23, 2020.. the day the music died for boomers..

Time’s up paleos… what a glorious week it will be ….viva la revolution… that’s an EV about to run you over……..
^^^^^^^^^^^^^^^^^^^^^^^
You’d think but the Collision Avoidance System will kick in.

First developed by a Boomer, of course.

#172 The Woosh on 09.20.20 at 11:00 pm

#162 IHCTD9 on 09.20.20 at 10:05 pm
#129 The Woosh on 09.20.20 at 8:23 pm
#94 dr talc on 09.20.20 at 6:35 pm
How does it differ from selling financial assets to fund retirement? They were also bought with after-tax cash. I think this is what many question. – Garth

The difference is the amortization schedule, buy a house for 1 million, after the 25 yr amortization schedule you’ve paid about 2 million
It’s a lot of things, but not profit. Profit is on the lender’s end.

————————————————

You’re dating yourself. Rates are nowhere near paying that much in interest. Try again. Current rates makes the interest paid a pittance even when it’s a million dollar house.
——

It’s lower now, but not a pittance. Over 400k in interest at 3% for 25 years on a million dollar house.

————————————————

$400k sounds like a big number when you look at a total like that. Simple math…divide that by 25 years and twelve months. Comes out to $1,333 in interest per month. Even at 3%, it’s still a bargain. A roof over a head using the bank’s money shouldn’t be free.

#173 SoggyShorts on 09.20.20 at 11:02 pm

#122 Millennial Surrealist on 09.20.20 at 8:09 pm
We’re taking over the planet boomers……step aside…you’ve done enough damage… to well everything….

https://moderndiplomacy.eu/2020/09/20/nearly-9-in-10-people-globally-want-a-more-sustainable-and-equitable-world-post-covid-19/
**************************
What an idiotic survey.
“Do you think the world should be more sustainable and equitable?”
Duh.
The fact that 14% said no is what’s shocking.

It’s a good thing for the boomers(and Gen X who were paying attention) that it’s too late for them to get hurt by any coming changes that will burden and crush the mill zoomers(and whoever comes next)

#174 Silver on 09.20.20 at 11:19 pm

i bought my home to live in

Government employees at BC Ass-esments turned it into a price bubble investment using counterfeit documents

they created counterfeit “equity documents”
creating a perceived price based on real estate provided documents.
to raise the house values above the sale price(promise to pay)

driving the cost of housing through he roof
and lining their pockets with extra pay

because there was so much unrealized profit in the tax base created one should be able to pay themselves more wages.

this was admitted to me by “BC Ass-essments Pro Legal Council

when he admitted to me you could sue them for the difference between the sale price and the assesment value on a yearly bases
his actual words when i laid out the assessment fraud was…

“OH MY GOD YOU CAN”

Have you ever had a “pro legal consul” use such words…

EVER……

government employees drove the price bubble to get richer paychecks.

i hope this entitled bunch of idiots in this country gets what they deserve.

I can’t wait to see these “tyvek and chipboard palaces” dissolve in the rain

reflecting the cheap quality of shoddy substandard construction this country has come to embrace

a country that has come to love Lipstick on a pig. believing that produces quality builds.

Silver

#175 Gunsmoke on 09.20.20 at 11:41 pm

Maybe Wednesday. Maybe the first Freeland budget. Perhaps after T2 romps to his next electoral victory. But it’s coming. You might wish to seek a defence.

____________________________________________

Thanks Garth. I just did. One in the chamber, safety off, cocked and at my bedside, speed loader in the nightstand. Don’t tell my wife, though!

#176 Ace Goodheart on 09.20.20 at 11:46 pm

Little problem with using “assessed value” to establish a land tax.

Our Muskoka cottage is assessed at $79,000.00

We paid $189,000 for it back in 2009 (basically the people who owned it gave it to us for free, we paid off their mortgage so they could bail – both lost their pensions in the great crash).

If I listed it tomorrow, I would get around 900K for it.

Our house is assessed at $600,000.00

I could call up a real estate agent tonight, and assemble an “offer night” this Friday. 30 or 40 people would show up, all with $100,000 certified cheques. We would get 30 unconditional offers, the highest would be just a hair under 1.7 million.

Our nicest rental building is assessed at $179,000.00

I could sell it tomorrow for over a million (I got another offer last week, not selling yet).

Assessed value is a joke.

#177 Shine on crazy diamond on 09.21.20 at 12:00 am

#11 Millennial Surrealist on 09.20.20 at 2:17 pm
Sept. 23, 2020.. the day the music died for boomers..

Time’s up paleos… what a glorious week it will be ….viva la revolution… that’s an EV about to run you over……..
_______________________________________________________________

As always, your post reeks of jealousy, self-loathing and self-pity . . .
After all is said and done, you will still be . . . well, a broke and pathetic victim! Unlike you, I will never be in want of anything for the rest of my life, under any circumstance! The quicker you accept your lot in life, the less agony you will subject yourself to….

BTW, you won’t be able to run me over because the “rolling coal” will leave you and your EV in the darkest cloud of soot you can imagine.

#178 Tccontrarian on 09.21.20 at 12:04 am

I found today’s blog and many of the comments very, very,…

……Taxing!

Y’all seem to be forgetting that if the budget can balance itself,
Justin can do just about anything!

#179 Keep Dreaming on 09.21.20 at 12:22 am

What everyone getting all giddy are failing to realize, is in order to collect capital gains tax there has to be a gain….but everyone is saying this will crash the market…so what will they tax if there is no gain?

With 100% certainty, the government will not risk political suicide on something that will potentially not generate any revenue. A transaction tax? Maybe. An large increase in the Land Transfer Tax? Perhaps. Capital Gains Tax? Don’t count on it skippy

#180 Nonplused on 09.21.20 at 1:43 am

#141 DON on 09.20.20 at 9:02 pm
03 Nonplused on 09.20.20 at 7:06 pm
So, on to other topic, namely 2020.

It seems every day the news get worse….

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

More likely a stand off/skirmish over Tawain. Can’t wreck Trump’s peace deal in the middle east. At least for the next 7 weeks.

White House Mail. I wonder if/how the Trump team will use it in an attempt to get Americans to rally behind him? Yah…first thought when I heard the news.

——————————

I think the ricin thing will go away and be overwhelmed by the supreme court vacancy. Taiwan? I think China is playing the slow game here. If the disagreement turns into a hot war China will not win and they know that. Otherwise they would have invaded long ago. And I am not even sure what their political objectives would be in claiming Taiwan as there own other than to move US friendly forces further away. Which is silly, tanks that can’t cross the water are not nuclear missiles which can. Both sides have to realise that this is an argument that neither can win. Time to put the pistols back in the holsters boys.

#181 Nonplused on 09.21.20 at 2:01 am

#115 Billy Buoy on 09.20.20 at 7:50 pm
I’d say taxing lotto winnings now is a lock for a new tax to be introduced.

Thoughts?

——————————

The best thing they could do is ban state sponsored lotteries. Lotteries for charity I think I am ok with, but government lotteries are just a tax on the stupid. Let me make it clear; the only way to win consistently is to not play.

#182 Shirl Clarts on 09.21.20 at 2:11 am

#135 Sara on 09.20.20 at 8:40 pm
^^^^^^^^^^^^^^
Nice posts tonight. Especially impressed that you took the time to respond to the trolls. Stone dont read to good.

#183 Nonplused on 09.21.20 at 2:20 am

You simply cannot tax capital gains on houses without incorporating all the other things like expense deductions and interest payments. Once those things are added in, well there is no tax owing except maybe in YVR and YYZ. Tax yourself to the hilt if you wish YVR and YYZ, my house hasn’t gained a dollar in 8 years here in YYC. I’ll be looking forward to my UBI check.

#184 Gg on 09.21.20 at 2:58 am

The property’s resale value grew $252,000 in 12 months. If a financial portfolio is not exempt from tax on market growth, why is that of a house? – Garth

Garth you can’t use another wrong to make your argument right. Capital gains shouldn’t be taxed. They were also purchased with after tax dollars.

“The appropriate capital gains tax rate,” Chairman Greenspan said, “is zero.” He went on to say–before a group of hard-nosed budgeteers, mind you–that “the net effect of reducing the capital gains tax, as it impacts total revenue–corporate income taxes, individual income taxes, and such–could very well be a …Feb 24, 1997

#185 Howard on 09.21.20 at 3:56 am

#144 Huh? on 09.20.20 at 9:13 pm
You are better off to rent than buy but people who bought made too much and deserve to be taxed more.

————————————–

Yes they deserve to be taxed more than the current 0%.

A renter who invests in securities as their financial strategy has to pay CG tax. Why not homeowners flipping their PRs every 2 years?

Are we all equal citizens or aren’t we?

#186 Mio on 09.21.20 at 4:05 am

Getting rid of the gains tax exemption seems fair, but only if, at the same time, the land transfer tax and annual property taxes are abolished. Over the life of ownership, a significant amount of taxes are already paid on a primary residence.

#187 Howard on 09.21.20 at 4:20 am

#155 Ace Goodheart on 09.20.20 at 9:45 pm
I can’t see T2 taxing principal residences in any meaningful way.

In most of Canada, people own their houses. Most of Canada doesn’t have Toronto and Vancouver house prices, so it is possible to get a mortgage, work at a job, and in 25 years’ time, you have a paid for house.

Many people do it, and have done it. In your average Ontario small town, the streets are full of old timers who did exactly that, and young folks who are just starting out on that journey.

20 somethings, who don’t want to work, want the world handed to them on a platter, and who all want to live in Toronto’s most Tony ‘hoods, in four bedroom houses with garages and back yards, are not going to get that, by taxing other people’s houses away from them. And I think they know that.

The other problem with a house tax is this: Houses are occupied mostly by families. Mom, Dad (or Dad, Dad, Mom, Mom or some other combination of genderless people) and a bunch of little kids.

So you put a heavy house tax on, and start evicting people.

People who have already lost their jobs due to COVID and are just hanging on, now having their houses taken, by a government that wants to appease twenty year old stoner kids who spend their days getting high and having casual sex with each other on Tinder.

Imagine the headlines, once these families start showing up in the shelter system.

The Federal government kicked us out of our house! Our children are homeless! Our family is destitute!

Good luck with that. The Libs will never win another election with that one.

——————————–

I don’t follow. How will a capital gains tax, charged once a home is sold if there was a gain, cause people to be kicked out of the homes they own?

And it’s also a bit rich to see Boomers complain that, after 60-70 years (!!) of government coddling their generation from childhood to old age and ensuring they NEVER have to realize a loss, the focus is finally turning to others.

#188 Wow I'm Gobsmacked on 09.21.20 at 4:59 am

Buy a home-Borrow Borrow Borrow. None of these fallacies would stand if Trudeau Bucks weren’t flooding cash out of Ottawa like a bank robber with a big hole in his purse. Its all DELUSION.

When this hits the FX our dollar will crater. The only people buying our dollar to artificially prop up the value is the BOC itself. We have only seen this once before during the Quebec bid for separation when the government spent billions buying dollars to stop people thinking that Quebec separation wasn’t a problem.

The value of our dollar is tanking and only your tax dollars created in Caribbean banks are what’s holding it up. Trudeau’s backers obviously think they can play this game until they reelect him and then show the nuclear crater they’ve cut into the economy, but too late for the sleepy voter to realize, too late, sad.

The reality is that between now and Justin’s reelection you will be set up for a tax gouging unparalleled in the history of any country in the world. Say goodbye to your house equity, replaced by housing for all. Say Hello to 100% taxation.

New Zealand doesn’t have the wherewithal to flood the recession with truth stopping cash and what happened?

https://www.bloomberg.com/news/features/2020-09-19/a-tourist-town-seeks-a-reset-in-a-world-without-foreign-travel?srnd=premium-asia

Trudeau killed energy and resource mining revenue. Flushed hundreds of billions in annual reliable revenue down the toilet. Gerald Butts at his side, they plot a cashless tomorrow. There is no way to prop up the reality of Canada’s massive recession except to sugarcoat it with free cash.

You have to be an idiot not to see where this is going. You can’t replace the lost hundreds of billions of industrial revenue with debt Justin, not in this universe.

#189 Steven Rowlandson on 09.21.20 at 7:24 am

How about levying a100% tax on home prices above $30,000.00 and 25 years hard labor for those demanding a price higher than the $30,000.00. If that doesn’t shut down the real life genocidal monopoly game then crueler punishments will have to be considered.

#190 crowdedelevatorfartz on 09.21.20 at 7:45 am

@#158 Ponzie’s Paper Preparations
“Been the Richmond IKEA today.
Wow. Jam-packed, parking lot full, 1/2 hour to get in, 1/2 hour to check out.”

++++
Toilet paper on sale? Or free hotdogs?

#191 crowdedelevatorfartz on 09.21.20 at 7:56 am

@#174 Silver.
“i hope this entitled bunch of idiots in this country gets what they deserve.”
+++
Not to worry.
When Trudeau’s spending and the stumbling economy finally crash into each other…
Cities and Provinces will be standing with their pants around their ankles wondering what to do next…. raise local taxes and user fees or…… cull 20% of their overpaid , under worked, govt staff.
May I suggest they start at the bottom of the dung heap(Human Resources) and work their way up.
The squealing will really start when the govt cuts the retired staff’s benefits and or bankrupt pensions…

Punitive taxes or severe, painful cuts
Inevitable.
In the brave new world of politically correct Millennials…

#192 crowdedelevatorfartz on 09.21.20 at 8:01 am

@#178 TC Contrarian
“Justin can do just about anything!”
+++++

Except finish a sentence without at least 6 pauses…”ummm, errr, ahhh, ahhh, errr, ahhhh”

The worst public speaker in decades.

Unless……. he has an earphone and is being told what to say……….

#193 crowdedelevatorfartz on 09.21.20 at 8:09 am

@#187 How-weird
“And it’s also a bit rich to see Boomers complain that, after 60-70 years (!!) of government coddling their generation from childhood to old age ”

++++
Please define “govt coddling from childhood to old age”…

Would that be the severe economic recession in the 1970’s? The run away interest rates of the 1980’s?
The high unemployement rates if the 70’s and 80’s?
Coddled…..r-i-i-i-ight.
The economy, unemployment and interest rates over the last 20 years have been the best its been in decades…. and if YOU squandered that opportunity…… dont blame Boomers.
Isnt there a rainbow sidewalk for you to re-paint somewhere? |Oh, right. That’s the govts. job.

#194 Wrk.dover on 09.21.20 at 8:17 am

Already paying $1200/yr property tax.

More coming? Ooo!

Life plan people. Plan your lives to include mitigation.

#195 Ace Goodheart on 09.21.20 at 8:24 am

187 Howard:

T2 is not looking at a capital gains tax on principal residences apparently.

He’s looking at a yearly levy on assessed value.

Sort of like a real estate capital tax.

A percentage of assessed value, paid to the Feds, forever.

Just another tax.

He’s also apparently looking at a vehicle tax, which would make an electric car cost the same as a gas car. So your gas car would be subject to a heavy yearly Federal levy.

To make you want to switch to electric.

#196 Captain Uppa on 09.21.20 at 8:30 am

How is change not inevitable when the average SFH in the GTA or Van costs $1.5 million? – Garth

——————————-

What about the rest of the country? You can’t tax the primary residences of a select few (VAN/GTA) and not the others.

Now if you put special onus on VAN/GTA, it would be highly unfair. Those areas, specifically GTA, are fueling whatever economy this country has left.

Not gonna happen.

#197 crowdedelevatorfartz on 09.21.20 at 8:33 am

A quote from John Bolton’s book The Room Where it Happened.

“…..dealing with Trump was like talking to an 11 year old…then I realized I was wrong…..by a decade……”

Classic.

#198 Dharma Bum on 09.21.20 at 8:34 am

#4 NSNG

Make a tax free economic zone in the most barren place in Canada.
——————————————————————–

Brampton?

#199 Louis on 09.21.20 at 8:39 am

My beef with all of this is that a significant part of the gain is actually inflation. That’s true for any investment. You are not moving ahead, you are just trying to hold on to what you have.

So I think you should have a baseline deduction on any type of asset tax based on inflation. ex: If you held the house 10 years and inflation was 2% a year, you should be able to write off 21.9% of the gain.

#200 bob on 09.21.20 at 8:41 am

Capital gains tax assumes house appreciates.

But what if the government does instate this at peak housing and then prices tank. Does that mean we can now expect capital losses to be claimed on taxes?

Of course not. – Garth

#201 Dharma Bum on 09.21.20 at 8:51 am

#87 Stealth

Hi Garth,

Which Defense shall we seek?
——————————————————————–

The best defence is a good offence.

Armed rebellion, if necessary.

#202 YouKnowWho on 09.21.20 at 8:54 am

From the top, if I may leave some comments on comments.

——————
#19 Lawrence on 09.20.20 at 2:42 pm

A land tax, on the land I own, I understand.
——————
Lawrence, you don’t own squadush. You “own” a leasehold to the Queen’s land. She OWNs it. How that came to be is another story, but facts are facts, you don’t OWN the land. You OWN a leasehold.

——————
#93 Nonplused

But there are other factors that make taxing primary residences immoral.

Nonplused, Garth talked about this already and logic on this point is not with you.

Property taxes are already the easiest picking there is and don’t discriminate. You’re a senior living in house that is worth triple now? Pay up taxes on the the reassessment value. Doesn’t matter how much you earn, pay up!
——————
Garth in article writes…

A quarter million, maybe, like in the US?
——————
I don’t think so Garth. I wouldn’t hold my breath for any exemption amount for a simple reason: if this is for the much needed revenue due to the recent spending bonanza, a $250K exemption would put most condos and many markets into this category. It would really be a tax on detached only in handful of markets at most, and even then, it wouldn’t bring as much revenue as is needed in light of recent developments. I mean, let us not kid ourselves, the hit on Government revenues has been quite significant over past 6 months, for reduced business activity, to income taxes, to RE, to everything. Maybe a token $100K exemption – but even that eliminates revenue from so many markets.

Plus, as noted – no one OWNS the land. They own leaseholds. So you’re holding paper(deed) to an immobile or immovable asset. As you point out in responses, why should there be exemptions on gains. Owner of the leasehold gained, has to share in the gain. Outcome is they are still ahead.

If I was betting, I’d bet no exemption. But to placate the masses maybe a $100K at the beginning that is quietly removed in the second stage a year later after the tax is phased in.

#203 YouKnowWho on 09.21.20 at 9:04 am

#59 Yuus bin Haad on 09.20.20 at 4:21 pm

“just isn’t true” – Adam Vaughan, Sep 2019

“We will cancel the GST” – Jean Chretien, 1993. – Garth

———————-

I said it before, and I’ll say it again.

If you listen to politicians and realize that everything they say is likely a lie and they are bait-and-switch experts, most likely driving toward a completely different outcome than they are telling you they are doing – your odds of being correct are significantly increased.

If you believe a politician, well…that’s on you. By now you should know better.

Also, I HIGHLY RECOMMEND people study and learn about the science of lying. Yes boys and girls, it’s a science. It’s fascinating too. And as you learn more about it you will see how fantastic it is, and how easy it is to exploit. Look at WWF (WWE now) a total lie, scripted fakery with known outcomes, and yet Vince is a billionaire. Why? How?

Remember how I told you about Bret Weinstein? Well, turns out he comes from a family of very smart people, and here is his brother Eric who is a PhD in Mathematical Physics to discuss many things, including the science of lying and how our brains process lies. More importantly, how many layers of lies you can keep track of before the whole house of nonsense folds in your brain and lies become truth. FASCINATING! And politicians have become experts at this layering of lies.

https://www.youtube.com/watch?v=wf0_nMaQ6tA

If you don’t want your brain to overheat, punch out before he presents an incredible new theory he’s worked on at the end.

#204 Dharma Bum on 09.21.20 at 9:12 am

The have-nots are a jealous mob.

They seem poised to become jealous zealots.

#205 Sara on 09.21.20 at 9:32 am

#195 Ace Goodheart “T2 is not looking at a capital gains tax on principal residences apparently.

He’s looking at a yearly levy on assessed value.”

The problem with that approach is it hurts low-income seniors more than a one-time capital gains tax on the sale which can be put off until death if necessary allowing someone to live in their home forever without the hit of an additional annual, potentially unaffordable housing tax.

#206 Sara on 09.21.20 at 9:38 am

#185 Howard ” Yes they deserve to be taxed more than the current 0%.

A renter who invests in securities as their financial strategy has to pay CG tax. Why not homeowners flipping their PRs every 2 years?

Are we all equal citizens or aren’t we?”

Agreed.

#207 Sara on 09.21.20 at 9:42 am

#182 Shirl Clarts ” #135 Sara on 09.20.20 at 8:40 pm
^^^^^^^^^^^^^^
Nice posts tonight. Especially impressed that you took the time to respond to the trolls. Stone dont read to good.”

Well, I have been accused on more than one occasion of not “contributing”(SoggyShorts?) to this blog, so I’ve turned over a new leaf. :)

#208 Ace Goodheart on 09.21.20 at 9:44 am

#11 Millennial Surrealist on 09.20.20 at 2:17 pm
Sept. 23, 2020.. the day the music died for boomers..

Time’s up paleos… what a glorious week it will be ….viva la revolution… that’s an EV about to run you over……..

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

You are like a child watching trains.

You cannot make something cheaper, by taxing it. Taxes make everything more expensive.

If Millennials and the kids who came after them want to own houses, then taxing property yearly will not do that.

That will just mean, that when they buy houses, they will have to pay the tax.

If they want cheaper stuff, shutting down Canada’s industries and replacing them with borrowed money, will not do that.

That will just mean that sooner or later, Canada’s creditors will demand payment in US dollars, triggering a currency crisis, and making everything very expensive (hyper inflation).

Low interest rates caused high house prices. Not “Boomers”. Interest rates are low because the “Me” generation demanded it. We elect our governments. Governments have figured out that handing out borrowed cash leads to election wins.

They have also figured out that taxes lead to election losses.

So they have borrowed money and handed it out, while not taxing their base enough to catch up to the borrowing.

This situation has recently gone completely nuts due to COVID. So we have ultra low interest rates, so that heavily indebted governments can continue borrowing money, giving it away, and buying election “wins”.

Where does this all stop? Well, consider that those multi million dollar houses you cannot afford, are actually a signal that our currency has been devalued. When the average income in the neighbourhood is 150K, and the houses cost $2 million, that is a sign that your money isn’t worth anything anymore. People have to borrow huge amounts, in order to buy anything of value (like a house).

When you are on the edge of a currency crisis, the first things that start to crack are the prices of hard assets. Things you can’t print. Like houses .

When a house costs fifteen years’ salary, before taxes, then you know that your currency is in trouble. You can borrow 1.5 million to put onto a house, coming up with the other few hundred thousand or so yourself. But you can never actually earn the amount of money that the house costs. Currency crisis.

Too many taxes, governments so badly in debt, then can never get out. Talk of Canada “never paying off its debt”. “New monetary theory” (which is really just communist monetary theory – print your currency as much as you like, give it away, and then control the means of production, so that goods go to those “most in need”. That is communism).

All of the above lead me to the conclusion that Canada is heading into a currency crisis.

So a bunch of Millennial economists who believe that economics means “FIRE” ing your way into early “retirement” by living in short term rentals and using discount jets to fly around the world, are not going to solve Canada’s money problems by taxing everyone to death.

#209 Ace Goodheart on 09.21.20 at 9:51 am

#201 Dharma Bum on 09.21.20 at 8:51 am

#87 Stealth

Hi Garth,

Which Defense shall we seek?
——————————————————————–

The best defence is a good offence.

Armed rebellion, if necessary.

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

Our fearless leader just borrowed 400 billion dollars, and gave it away.

That all now needs to be paid back. By you and me and every other working person.

Our fearless leader has now decided to do it again. Borrow another 400 billion, and keep doing it. Again and again and again.

The horse is out of the barn and escaped from the field. The time for armed rebellion was in May when all of this started.

You would not want to get control of Canada now. It is just too much of a mess.

Watch Erin when he says he does not want an election. He is hoping to avoid being saddled with the financial basket case that is Canada.

There is a beauty to being opposition. Complain about everything, be responsible for nothing.

#210 Chimingin on 09.21.20 at 9:52 am

Re-#170 – Wisdom:

Hi Wisdom, I am no expert but in considering your post and questions, I put myself in your place, as we are of similar age and outlook. I wouldn’t presume to give you financial advice so am skipping those questions, but if you moved to one of the nicer apartments you mentioned, you’d still be saving money that you could put to retirement, list your long-term tenant status as a plus for the new landlord (and possibly get something out of that as I assume good tenants are like gold), and have nicer digs. Facing the possibility of a second cancer diagnosis, I think quality of life is key…you can’t take the $$$ with you, as they say. Cheers and take care.

#211 Barb on 09.21.20 at 9:56 am

Hopefully Teddy veers more easterly and misses the coast of Nova Scotia.
Stay safe, Garth, Dorothy and Bandit.

I plan to surf it off Peggy’s Cove. – Garth

#212 millmech on 09.21.20 at 9:59 am

#195 Ace Goodheart
https://www.cbc.ca/news/canada/british-columbia/vancouver-approves-property-tax-fentanyl-1.3894726

This is how it will be done, no one even questions where the money is going, not a peep or a whimper when this was implemented.
Home owners will not even feel it at first much like the camel and the tent parable.

#213 Post on 09.21.20 at 10:11 am

About 4 years ago I posted a note on here, about taxing profits on residential real estate. Especially on profits for people that held or resided in the home for a short period – flippers.

Equity investors don’t get that slack. Hell, if they make a profit after selling their stock after 1 day, they pay capital gains.

When I suggested, the same thing in tonight’s blog that everything else is taxed including savings account – it’s time for residential real estate too. It was pretty much an internet lynching.

#214 DON on 09.21.20 at 10:11 am

Money laudering and the banks…

It is official.

#215 TurnerNation on 09.21.20 at 10:21 am

Nobody will get a free ride in the New System. Women know your place! Work work work. The State will raise your kids, turn them over to the State for re-education and maybe drugging. Your place is as a tax slave. Freedom 70. Maybe.

They are saying Just Get Working! And don’t stop. New Debt was piled on to you. Work it off.:

“Globe says Scotiabank CEO calls for childcare spending
2020-09-21 09:30 ET – In the News
The Globe and Mail reports in its Monday edition that the chief executive officer of Bank of Nova Scotia is urging the federal government to “significantly” improve its supports for parents with children in daycare to allow more women to thrive in the work force. The Globe’s James Bradshaw writes that Brian Porter, in an opinion article contributed to The Globe, is calling for the federal government to spend $15-billion annually to top up existing benefits and tax credits for parents who need child care. He recommends increasing the Canada Child Benefit to $5,000 annually for each child in daycare, or more than $400 monthly. He also suggests raising the deduction limit on the Canada Child Tax Credit to $20,000 a child, compared with the current $8,000 limit. Prime Minister Justin Trudeau has promised to craft an ambitious stimulus plan to fuel Canada’s economic recovery from the pandemic, signalling a willingness to spend on big-ticket social programs. More recently, Finance Minister Chrystia Freeland tempered expectations, promising a “wise and prudent” plan focused on getting Canadians working while keeping COVID-19 under control. Mr. Porter said helping women could lift Canada’s economic output over time.
© 2020 Canjex Publishing Ltd. All rights reserved.”

#216 Ace Goodheart on 09.21.20 at 10:25 am

RE: “Renting is a valid option for many, especially the young who (more than ever) need mobility to land the best jobs. Homeowners never just pay the mortgage – add in closing costs, financing charges, property taxes, insurance, maintenance, condo fees, repairs and renovations. Then fork over 5% or so to sell. Plus HST. If capital appreciation is not factored in, renting is a far cheaper way to live. – Garth”

The problem is, you need someone to rent from.

We could try what many South and Central American countries have done, and just have all properties owned by the government, and rented out to those who live in them.

It’s hard to get a lease, but once you have one you are golden. Like “buying” a land lease on the Toronto Islands. Super cheap living.

The problem with renting, is landlords. Most of them are heavily indebted persons or companies, and many of them are in the game for the capital gains. As a renter you face the constant prospect of being told to leave, either because your landlord is moving back in, or because they are selling to harvest their capital gain.

If there was a long term land lease purchase system, then there would be no fear of constantly losing your dwelling to private interests.

You purchase the land lease in a controlled environment, and then hold it as long as you like. The property is owned by the state, and the land title cannot be purchased.

That is how you create low real estate prices. They did it with the Toronto Islands, and it worked out quite well.

They will never do it in Canada. And I’m not saying I support it (I don’t, I like owning my house). But what I am saying, is there are methods for reducing housing costs. Our government, with their former Rainbow Gathering organizer leaders and their hippie hollow Cabinet retreats, would know about all of this stuff. It is the stuff of hippie dreams.

#217 TurnerNation on 09.21.20 at 10:37 am

For the Schlock Pickers.
And this is why I come to this pathetic weblog’s comments section. Seeking Alpha with Zero Hedge:
…………

“#5 KNOW IT ALL on 09.12.20 at 9:59 am
Plug this in……FNGD
Thank me later.”

#218 conan on 09.21.20 at 10:40 am

I think it is easy to set up a tax on capital gains on primary residence. Everyone has to keep their renovation bills and , total up their interests costs.

Say good bye to the underground construction economy. This toasts them. Probably ends up saving Workman’s comp as well. Not to mention the army of construction workers who get stuck in the underground economy and can not get out.

#219 Linda on 09.21.20 at 10:46 am

#136 ‘Woosh’ – odd how you ignore the practical aspects of the comments – the expenses associated with owning/operating that ‘product’ – in favour of dismissing the concern by labeling it as ’emotional’. Does not take away from the point that if/when additional taxation is applied to home ownership that there must be a mechanism in place to claim expenses associated with that product. Think business expense, or is that too ’emotional’ a point for you to grasp?

#220 Ace Goodheart on 09.21.20 at 10:49 am

#94 IHCTD9 on 09.20.20 at 6:33 pm

Yep, just enough, for long enough; to make home flipping a no win situation. No more, no less.

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

The government has to crush the whole house flipping, live-and reno, then sell business, into a pulp.

They need to get rid of this.

These people are as close to crooks as you can get, basically tax scammers and evaders. These people have to get taxed as business operators, because that is what they are.

We have had them in our neighbourhood. They buy, pretend to “move in”, make friends with people, and reno, reno, reno. A year or so later, they sell a fully reno’d house for a profit, and away they go to buy another house. They take their full profit, tax free.

They are operating a business buying houses, fixing them up, and selling them. Tax free, using the principal residence exemption.

We have to crush these people. This is completely unfair and it puts pressure on people who actually live in their houses.

I know the government and the CRA has cracked down on these folks. They need to keep doing it.

#221 Linda on 09.21.20 at 11:04 am

#140 ‘Soggy’ – Agreed. If more taxation is applied, the simple solution as proposed in your post would be best. I like the concept that period of ownership would reduce the tax hit.

#222 Marcia M on 09.21.20 at 11:17 am

#211 – Hopefully Teddy veers more easterly and misses the coast of Nova Scotia.
Stay safe, Garth, Dorothy and Bandit.

I plan to surf it off Peggy’s Cove. – Garth

———————————————–

NOOOoooooooooooo!

I can’t take that picture out of my head, Garth.

Please at least say you won’t be wearing a Speedo?

Of course not. Only natural body fur. – Garth

#223 MaskArade on 09.21.20 at 11:28 am

“Home owners pay nothing ” – this is not a true statement by any means. Home owners pay property tax, utilities tax usually 100% more then utilities used, home repairs, yard repairs, basement developments. If the government wants to tax my home, JT better start cutting my lawn or replace my light bulbs, etc. Would you be able to claim capital losses on your residence? Is the government covering house insurance? Only in Canada one’s home is considered a piggy bank…… for the government to tax and spend, they wont be happy until everyone is dependent on them.

The statement referenced capital gains. Homeowners pay nothing. – Garth

#224 Jezebel Mintocs on 09.21.20 at 11:36 am

Think it’s tin foil hat conspiracy theory to be laser focused on the globalist takeover? Try hearing it out of their own mouth.

Now think about everything Trudeau and Freeland have announced. They are mouthing a party line. These a-holes are using the virus as an opportunity…. What’s best for Canada doesn’t matter…. No wonder they hate Trump so much for stopping their NWO multilateral takeover by a communist elite. Trump stopped them, if you value your freedom you need to support it. Don’t go quietly into the night.

https://financialpost.com/opinion/terence-corcoran-the-twin-panics-of-covid-19-and-climate-threaten-freedom

https://financialpost.com/opinion/terence-corcoran-the-twin-panics-of-covid-19-and-climate-threaten-freedom

#225 Ronaldo on 09.21.20 at 11:45 am

#218 conan on 09.21.20 at 10:40 am
I think it is easy to set up a tax on capital gains on primary residence. Everyone has to keep their renovation bills and , total up their interests costs.

Say good bye to the underground construction economy. This toasts them. Probably ends up saving Workman’s comp as well. Not to mention the army of construction workers who get stuck in the underground economy and can not get out.
—————————————————————
All they need to do is tax the dirt under the house where most of the gain is.

#226 april on 09.21.20 at 12:00 pm

#223 – It is a true statement. Your not listening. I bet Garth knows much more about these matters than you.

#227 TurnerNation on 09.21.20 at 12:01 pm

The more we tax Boomers’ real estate the SMALLER the money inherited/passed on to Millennials (their kids). Do they realize?

#228 YouKnowWho on 09.21.20 at 12:11 pm

#7 Felix on 09.20.20 at 2:05 pm

Stupid canines wreck every home they enter.

Get a cat, if you’re smart enough.

—————————–

BEST. COMMENT. TODAY.

MEEEEEEOW!

#229 IHCTD9 on 09.21.20 at 12:29 pm

#220 Ace Goodheart on 09.21.20 at 10:49 am
#94 IHCTD9 on 09.20.20 at 6:33 pm

Yep, just enough, for long enough; to make home flipping a no win situation. No more, no less.

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

The government has to crush the whole house flipping, live-and reno, then sell business, into a pulp.
___

Well a good solid CG tax on PR’s is a good way to inhale the potential profit out of these ventures, just need a carefully chosen time limit. Like maybe 5 years. Tax say, 50-75% CG on top of income and I doubt many would want to risk a flip – even in the GTA/GVRD. Meanwhile those using their homes to raise a family typically aren’t moving out in 5 years so they’d be exempt 95% of the time.

Folks might be a little more cautious about when and where they buy too. I realize some legit owners will get burned if forced to move before the time limit – there’s going to be some collateral damage no matter what you do.

There’s a guy reno’ing a house down the road right now. Bought this summer from elderly couple, it’s still 70’s inside. It’ll be on the market next spring for 150K or more than what he has into it.

I hate to say it – but I hope he blows his brains out on it. I’d rather see a young family in there with the homeowner fixing things up over the years.

#230 Ubul on 09.21.20 at 1:04 pm

Lawrence, you don’t own squadush. You “own” a leasehold to the Queen’s land. She OWNs it. How that came to be is another story, but facts are facts, you don’t OWN the land. You OWN a leasehold.

Let’s talk about it more. How it came to be, how it stayed to be and how can be changed. There is no acceptable reason for the queen’s landownership to continue in Canada, that doesn’t invite conspiracy theory.

#231 TurnerNation on 09.21.20 at 1:24 pm

Fodder for a weblog topic. Removal of our independence and capitalistic ways.

from IE:

“A new report from Statistics Canada studied the financial wellbeing of two groups of unincorporated self-employed individuals: those whose only income is self-employment income and those who are self-employed but also have another job.

The news wasn’t good for people who didn’t have a second job. Those folks were likely to “remain under severe financial strain” as a result of the pandemic, StatsCan warned.”

#232 TurnerNation on 09.21.20 at 1:33 pm

Wow this might explain the coming taxes, if this really is a textbook in Canadian schools. As animals, we are to be ranked and judged on physical attributes – horse show – by our global Tax Farm farmers:

https://preview.redd.it/54h43uembio51.jpg?width=556&auto=webp&s=5b0d5cccdf0701a3b4e95a63f52cdcf5dda7613b

#233 Gigi Lamanze on 09.21.20 at 1:38 pm

Northshore Guy, you are so right. I wish more younger people had common sense and knew what they were talking about.

Most of the younger generation think they know everything and the left, Liberal, NDP, Green Party and this socialist mentality is a losing game. It is easier to take, steal then build something. It is easier to tax then build something.

Look at his father Pierre Trudeau, it was a disaster all his policies and Justin Trudeau, Freeland Liberals are no different. Canadians will be even more poorer no matter how much money they get from the government. It never works. Ontario is the perfect Canadian example with the McGunity, Sorbara, Wynne Liberals destroyed a once leader in economic and financial strength to an economic, financial basket case.

#234 DownToFinance on 09.21.20 at 2:01 pm

#164 IHCTD9 on 09.20.20 at 10:18 pm
#146 DownToFinance on 09.20.20 at 9:26 pm
Garth, majority of the electorate are homeowners as you pointed out previously so it would be political suicide to propose any form of end user tax on housing. Never gonna happen in Canada. If the liberals proposed a housing tax they would be handing an election to the Conservatives on a silver platter
——

I own a house, and I’d support it – if it were done right, with a time limit. This way, home buyers intending to use the house for a home – pay no tax, but those trying to make money flipping them find it unprofitable.

I’m totally not down for a universal PRCG tax for all, few would be, and that would definitely be political suicide.

You are a rare breed then. Majority of homeowners don’t think this way.

I agree though there should be a PRCG tax. I’m a renter so my tax free investment contribution limit is only that of my TFSA and RRSP. My parents don’t have any RRSPs and TFSAs, never made any responsible investments but their $1 million dollar house that they bought for $325k in 2003 is basically unlimited tax free capital gains.

My household income (inflation adjusted) is 3 times their peak household income and yet I’m priced out of that same market, so no tax free capital gains for me.

Prudence is simply not rewarded in Canada.

#235 SOMETHINGS UP!! on 09.21.20 at 2:26 pm

The real question?

Will Real Estate prices ever drop and if so when?

#236 Ubul on 09.21.20 at 2:38 pm

#233 Gigi Lamanze

The poorer they are, the more they depend on government, and this determines which party they vote for.

The increasing poor segment of the population has no choice but to keep voting for liberals and NDP to keep their head above water.

Perfect catch-22. The responsibility of the conservatives for this situation is that they never managed to make globalism work for the masses.

Perhaps globalism was destroying the middle-class in North-America regardless of which party was governing. It is too late now, the erosion seems irreversible. Weird freaks will drive society and economy to a reset. The best resistance maybe the acceleration of hitting the bottom, hoping to survive the deep dive.

#237 SoggyShorts on 09.21.20 at 2:46 pm

#207 Sara on 09.21.20 at 9:42 am
#182 Shirl Clarts ” #135 Sara on 09.20.20 at 8:40 pm
^^^^^^^^^^^^^^
Nice posts tonight. Especially impressed that you took the time to respond to the trolls. Stone dont read to good.”

Well, I have been accused on more than one occasion of not “contributing”(SoggyShorts?) to this blog, so I’ve turned over a new leaf. :)
***************************
Not terrible, but perhaps a little one-sidded.

Sure, homeowners who have nothing to their name but a home would be emotional about a change in taxes on it.
I think you’re very wrong that people are not as emotional about their portfolios though. Do you know anyone who had all of their networth in the market this year? And that was all temporary whereas a new tax would effect them for the rest of their lives, possibly dramatically shifting retirement planning and budgets.
People get emotional over that stuff too.

#238 Sara on 09.21.20 at 2:54 pm

#227 TurnerNation “The more we tax Boomers’ real estate the SMALLER the money inherited/passed on to Millennials (their kids). Do they realize?”

So what? That doesn’t help them to buy houses now.

#239 The Woosh on 09.21.20 at 3:02 pm

#221 Linda on 09.21.20 at 11:04 am
#140 ‘Soggy’ – Agreed. If more taxation is applied, the simple solution as proposed in your post would be best. I like the concept that period of ownership would reduce the tax hit.

—————————————————

So, if I hold my stocks for a certain amount of time I’ll pay less capital gains. Bahahahahahaha! Oh, that was rich!

#240 Sara on 09.21.20 at 3:05 pm

#237 “Not terrible, but perhaps a little one-sidded.
Sure, homeowners who have nothing to their name but a home would be emotional about a change in taxes on it.
I think you’re very wrong that people are not as emotional about their portfolios though. Do you know anyone who had all of their networth in the market this year? And that was all temporary whereas a new tax would effect them for the rest of their lives, possibly dramatically shifting retirement planning and budgets.
People get emotional over that stuff too. ”

Generally speaking, home ownership has a unique element of emotion to it that stock ownership does not. Garth talks about this all the time. And this is true regardless the age of the home owner. Not saying people don’t get emotional over losing or gaining in the stock market, but it’s not on the same level as the Canadian dream of home ownership.

Whether appeasing young wannabe home owners by helping to make home ownership more affordable or placating current home owners who feel they deserve their lottery winnings of late, government has to perform a balancing act.

Nothing one-sided about that viewpoint I don’t think.

#241 Sara on 09.21.20 at 3:05 pm

#237 “Not terrible, but perhaps a little one-sidded.
Sure, homeowners who have nothing to their name but a home would be emotional about a change in taxes on it.
I think you’re very wrong that people are not as emotional about their portfolios though. Do you know anyone who had all of their networth in the market this year? And that was all temporary whereas a new tax would effect them for the rest of their lives, possibly dramatically shifting retirement planning and budgets.
People get emotional over that stuff too. ”

Generally speaking, home ownership has a unique element of emotion to it that stock ownership does not. Garth talks about this all the time. And this is true regardless the age of the home owner. Not saying people don’t get emotional over losing or gaining in the stock market, but it’s not on the same level as the Canadian dream of home ownership.

Whether appeasing young wannabe home owners by helping to make home ownership more affordable or placating current home owners who feel they deserve their lottery winnings of late, government has to perform a balancing act.

Nothing one-sided about that viewpoint I don’t think.

#242 Linda on 09.21.20 at 3:44 pm

#156 ‘John’ – the rent you pay is taxable income in the owner’s hands as stated previously by Garth in this blog. So if the rent you pay is taxable income, the house you occupy may well be paying more in expenses including taxes than the owner gains in revenue – also explained in this blog when renting vs. purchasing is discussed. So the premise that you pay more in rent than a home owner pays to purchase & maintain a property may not in fact be true.

#243 p on 09.21.20 at 3:51 pm

Primary residence tax idea: 4%/yr owned of profits (and losses, cause why not?) above purchase price are tax free gains. Hold a house (and pay off your mortgage…lol) in 25 years – all the gains are yours. Want to be a flipper, sounds great and sounds like a job, pay your taxes. Caught in the middle and own a house for 10 years, have a kid and get it delivered for free at a hospital, and enjoy other un-quantifiable benefits of the social system.

#244 Peter Fanza on 09.21.20 at 4:24 pm

I agree with you. MaskArade, real estate is not the culprit. It is low interest debt, mortgage. They should tax mortgages, lines of credits, home equity loans etc. Any type of debt that keeps real estate speculation and artificially hig to higher prices.

Liberals, NDP, leftists, socialists, marxists, communists etc. don’t do anything to help society. It is all smoke and mirrors. This is just like taxes on the environment and green energy etc. It is all about taking, stealing more money away from people and this gives them power and control over people’s lives. This is why they don’t tax real estate debt.

We already did have an economic mechanism that works so well and the Bank of Canada and governments don’t have the guts to fix it. It is called much higher interest rates, 5% to 6% just to start.

My personal take and experience and observation of all this for the last 25 to 30 years is this was done by design and financial and socially engineered by banks, financial institutions, governments and international organizations etc. The higher and higher debt and real estate pumping up prices plus very low interest rates from 13 to 14% mortgage rates to now 1.7% to 2% mortgage rates.

#245 Beetman on 09.21.20 at 6:06 pm

With the likes of T2, Freeland, Butts and millions of people looking for freebies and T2 wanting to stay in power at any cost. What pray tell could possibly go wrong. Mexico is starting to look like an option.

#246 William R Drury on 09.21.20 at 10:44 pm

DELETED