Christy Clark is the new Premier Designate

[Wilber]

Like what?

Mortgage interest? Property tax?

Renos, roofs, paint jobs, repairs, all the other things it takes to keep a house going for 60 years.

I'd take the tax free gain and save the $460,000 in tax now rather than save $54,000 (ish) over 60 years.

What would you do with it at 95 other than give it to someone else?

[TimG]

What would you do with it at 95 other than give it to someone else?

The point is the differences in rules exist for reason. Perhaps your mother in law does not care about the taxes her estate will pay but the vast majority of people would choose no tax on capital gains rather than being able to deduct incremental expenses.

[Wilber]

You're acting like the consumer lives in a isolated bubble here.

I'm maintaining the opposite. The consumer pays the sum total of everything that went on before including taxes.

[Wilber]

The point is the differences in rules exist for reason. Perhaps your mother in law does not care about the taxes her estate will pay but the vast majority of people would choose no tax on capital gains rather than being able to deduct incremental expenses.

I think it depends on a lot of things. If you live in an area where home prices have appreciated rapidly, you are probably right. If you live somewhere where they have been stagnant, you could be better off with the write offs.

Under the US system where mortgage interest is deductable, you are not subject to capital gains if you buy a home of equal or greater value than the one you sold.

[TimG]

Under the US system where mortgage interest is deductable, you are not subject to capital gains if you buy a home of equal or greater value than the one you sold.

And every economist agrees the US mortgage subsidy is bad policy that inflates home prices.

[Wilber]

And every economist agrees the US mortgage subsidy is bad policy that inflates home prices.

No inflated prices here, no siree.

[TimG]

No inflated prices here, no siree.

It would be worse if mortgage interest was deductable.

[msj]

Renos, roofs, paint jobs, repairs, all the other things it takes to keep a house going for 60 years.

If the government allowed that then they wouldn't tax the gain as capital but regular income. So the tax in the end would be $920,000 rather than $460,000.

Then we would have to deal with people who want to deduct their car, and their clothes, and their kids diapers, and their toilet paper, and their depends etc....

In fact, I already get a lot of questions like this each year.

Why is it so hard to understand that there is a difference between personal use and business/investment use?

Of course, if the government were to allow people to write off personal use items against taxable income then it would simply raise our income tax rates (not to mention make our tax system even more complicated).

What would you do with it at 95 other than give it to someone else?

Well, maybe I would've sold at 80 and have gone on a nice trip before going on a diet of bacon and cigarettes so I could die "peacefully" in my sleep.

[msj]

It would be worse if mortgage interest was deductable.

It probably would but it is hard to imagine.

Toronto is at around 8 times median income, Vancouver at 11.

We're making the US in 2005/2006 look rational by comparison.

Just goes to show that markets are emotionally based at times and fundamental count for naught.

Edited April 24, 2011 by msj

[TimG]

Just goes to show that markets are emotionally based at times and fundamental count for naught.

We have a lot of real money coming in over overseas. I read immigrant investors are moving $1 billion/year to this country. A lot is going into real estate. As long as those flows continue the property prices will rise.

[msj]

We have a lot of real money coming in over overseas. I read immigrant investors are moving $1 billion/year to this country. A lot is going into real estate. As long as those flows continue the property prices will rise.

Then these people truly are greater fools.

One could buy a nicer house in a warmer climate (i.e. Arizona, California, Oregon, Florida, etc) for a fraction of what it costs in Vancouver.

It's stupider money following stupid money.

[TimG]

Then these people truly are greater fools.

I hope that will be the case. But there are alot of rich people in China and the have a penchant for buying property. They could keep this market going for quite awhile.

[Pliny]

Then these people truly are greater fools.

One could buy a nicer house in a warmer climate (i.e. Arizona, California, Oregon, Florida, etc) for a fraction of what it costs in Vancouver.

It's stupider money following stupid money.

Not really.

Climate is not the only consideration. How about the decline of the US dollar and US economic dominance?

Canada is still a great bargain.

[Handsome Rob]

We have a lot of real money coming in over overseas. I read immigrant investors are moving $1 billion/year to this country. A lot is going into real estate. As long as those flows continue the property prices will rise.

As am investment vehicle, not even a vacation home. Is there an investment anywhere that doesn't at some point, lose value?