Canadian Realestate Magazine forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Ontario urging Ottawa to change tax rules in bid to curb real estate speculation

Notify me of new replies via email
Canadian Realestate Magazine | 20 Mar 2017, 04:42 PM Agree 0
Ontario Finance Minister Charles Sousa is urging Ottawa to address speculative investing in the country's housing markets by changing how such profits are taxed
  • Jeremy | 20 Mar 2017, 05:12 PM Agree 0
    Another politician crying victim. Get off your ass and make policies specific to your own provincial issues...don't drag the rest of Canada into this! Implement a tax like BC did. But let me guess...he doesn't want to look like the bad guy.
  • David | 20 Mar 2017, 05:14 PM Agree 0
    There is a big difference between speculating in the market and running a rental property investment business. I do hope that if changes are made that they take into account those investors who are purchasing property for long term investment and not immediate turn-over. This will cause a lot of pain points for real estate investors who are not short haul speculators.
  • Arnold Handelman | 20 Mar 2017, 05:26 PM Agree 0
    If a person buys a house for purposes of flipping it, it is a venture in the nature of trade, and fully taxable.

    If he buys it for rental income purposes, and keeps it to earn income, and it does earn income, then it's a capital investment and the ultimate gain will be a capital gain with only 50% taxable.

    I would suggest that if a person buys a property, say a condo apt., and rents it at a negative cash flow, ie he loses money every month; or if he barely breaks even, then he is really buying it to make a profit by selling it. So then, it is again, a venture in the nature of trade, and should be fully taxable.

    So I don't see any need for changes in the taxation of real estate. Removing the principal residence exemption would be political suicide for any government. The CRA already has clarified and limited abuses regarding a taxpayer having various properties which could be called his prinicipal residence. He has to pick one, and that's it. It can't be the cottage, and then the house.

    Where there is a weird evolution in taxation of investments, is the stock market. You could buy a stock that pays no dividends. So obviously you bought it for purposes of selling it at a profit. That should be fully taxable, by using the same logic as for real estate. The stock purchase was a venture in the nature of trade. Even more un-capital, buying commodities, options, derivatives, forex. All very specualtive ventures in the nature of trade. But, the tax laws as they've evolved enable these speculative ventures to be only taxed at capital gain rates.

    So we can see, that real estate investment isn't the arena getting favoured status, it's the stock market, the derivatives, options, commodities and foreign exchange markets that get unjustly favoured status. That's the tax change that should be altered.

  • Pete | 20 Mar 2017, 05:32 PM Agree 0
    What about considering self-employed individual investors or those who don't have a defined benefit pension who may have one rental property? The idea was to use the investment property eventually as their pension income and/or to utilize the capital gain to fund their retirement. By changing the rules now, these people will find it more difficult. Appears that not a whole lot of thought went into this.
  • john | 20 Mar 2017, 05:40 PM Agree 0
    Raising the capital gain percentage isn't going to change anything, don't waste your time.
  • M | 20 Mar 2017, 05:51 PM Agree 0
    It's the Walter Gordon all over again, and driving away investors.
  • klb.investing | 20 Mar 2017, 05:53 PM Agree 0
    What a stupid idea.

    The last thing we need to do is raise the capital again amount. There are countless building owners who's building are being run down because they can't sell their buildings. They can't sell because they'll be looking at over a $1M in capital gains. This is a large reason how buildings can become slums. If anything you need to drop the capital gains so people will sell these buildings new owners can take over and run them with care. jsut doing this would increase jobs in the local areas.

    Comments like this are making me second guess our politics in our country. In the states there is no capital gains if the money is re invested into real estate. Real estate industry is a massive economic driver. Why would you want to slow this down.

    I think they are making up reasons and trying to find ways to pay down the debt. The debt is a problem, but increasing taxes is not the solution, let's increase our GDP so more people can make money to afford these homes. Why are they trying to penalize someone for working hard and earning profit to provide for their families. Why is this so wrong.
  • Kathryn | 20 Mar 2017, 09:20 PM Agree 0
    So After years of putting up with every sort of crisis 24/7 on my rental properties with marginal returns
    and now looking at finally getting the reward for literally thousands of hours of crap from rentals.
    By considering to sell off some of the rentals for a reasonable retirement these clowns in the Trudeau's government of
    I am lying about, deficits and parliamentary reform.As well as not taxing the middle incomes now wants more of my retirement.
    He already put the top tax to 33% over $200k earnings, just the amount that i will get after years of this rental industry.
    So wonder there are no rental building .Who would want this after decades of work with less reward than gamblers
    on the stock market.Try reducing the amount of immigration that goes only to the big cities Vancouver
    and Toronto putting a strain on housing.try looking at your Government blunders that keep housing unafordable.
    This TAX idea will create less construction especially of rental housing.
    here's an IDEA let me take my Money to the states where they will appreciate my investments.Trudeau.
  • Racquel | 20 Mar 2017, 09:29 PM Agree 0
    PS one of the reasons we gave up on RENTAL Investments in Ontario was the rights of professional tenants who move in
    with the idea of NEVER paying a thing with the Governments blessing while you go into debt supporting the PROfessional
    tenant. Who after 6 months or a year skips on to the next victim.Leaving you with the bills and usually the damage.
    Thanks Ontario.We went down this road 3 times till we sacked Ontario for BC.
    Signed used to be a Social democrat
  • Peter | 20 Mar 2017, 09:31 PM Agree 0
    Flipping gain is already 100% taxable. Sever rental shortage will result when nobody buys a second place.
  • Mark | 21 Mar 2017, 05:40 PM Agree 0
    This proposal will only penalize the honest investors who are already paying the capital gains when they declare sales of investment properties on their income tax. The people who are cheating the system, and paying ZERO capital gains are the ones who should be targeted. The feds have started to collect data, in 2016 tax year, which requires home owners to declare when they sell their principal residence. Find the crooks and there would be no need to penalize the honest tax payers.
Post a reply