I am a homeowner for the past 22 years and am planning on moving to the Okanagan in a few years once I retire.
I am a homeowner for the past 22 years and am planning on moving to the Okanagan in a few years once I retire. With talk of the capital gain tax coming, I would be paying tax on gains over 1.2 million. How do you think the government will implement this tax. What is you advice? Would it be better to sell now to avoid the tax and buy something in the interim? I look forward to hearing from you. Thanks for your time.
The million-dollar question. Trudeau stated that the Liberals will not take away the Capital gains tax exemption. He also said, he has (thru CMHC) not commissioned studies on wealth taxes in general and elimination of all free or low capital gains taxes. Alas, the facts are:
In 2016 Trudeau brought in the registration of the sale of all private residences. Why? It is tax free gain, right? So, why?
Last year he brought in a capital gains tax on private residences that are sold in a year after purchase. A 100 per cent gains tax (66% – 100%). Ask yourself, how easy that would be to make it 2,3,4,10 years after purchase. And there you have the prime residence capital gains taxes exemption – eliminated.
Now, your question is how far back will they go? Well, at least back to 2016 when properties started to be registered at CRA. Since most capital gains (50% or so) for many homeowners came after that date…hmmm?
Can they do it further retroactive? BC Liberals did it with the foreign buyers tax, against all common sense. I called it dastardly at the time. We are taxed a lot worse now.
Yes, they could. Go to Land registry – get purchase price on every property in Canada, measure total amount of gain based on median prices. All boards have them. Not Benchmark prices – don’t go far enough back. Give an annual allowance for insurance, taxes and other costs, some repairs…and grab the balance. Not saying they will. But could they? Again – read Generation Squeeze website.
Solution?
I don’t have any. Just ask yourself how long it would it take to save 1.2 million tax free? Ideally your neighbour has the same house…you buy his and he buys yours. Trigger the gains. Live happy ever after.
