Capital Gains Tax on Primary Residences

[ExFlyer]

16 minutes ago, cougar said:

Control of demand:

1. Immigration

2. Allowing people to own unlimited number of properties and units

Control of supply

1. Providing land with a residential classification ready for development

2.  I imagine there are a wide range of bureaucratic measures here

1. Immigration? Are you saying immigrants are the ones driving up housing sales and prices?

2.  Are you insinuating that a person cannot own more than one property?

 

1. Are you saying that governments are not allowing housing development? Maybe it is the NIMBY crowd opposing. Look at the shit storm going on in the York region with government opening green space and the public is outraged.

2. Government red tape is for sure a big factor in development costs. that is a given.

[ExFlyer]

18 minutes ago, cougar said:

You have to take Mike out for a drink with you.  It may grow into something bigger.?

Why?

Because we both understand business and the reality of ownership?

Do you own a house? Do you have a mortgage? Then you should know what your annual cost of home ownership is and that every year it costs more. Are you somehow saying that if you rented or leased your house oyu would charge less than the cost of your ownership? That you would be charitable?

[Moonbox]

On 4/20/2022 at 4:52 PM, Michael Hardner said:

1. Sure but the poor countries with high birth rates aren't harming the planet.  It's middle class consumers who are, ie. us

That's not really true at all.  Maybe you can say that first-world consumers harm the environment more per-capita, but Canada's footprint is quite a lot smaller than India's.  

On 4/20/2022 at 4:52 PM, Michael Hardner said:

2. Some challenge that orthodoxy but ok.

They can challenge the theory that leads to the necessity, but not really the necessity itself.  We can't support pensioners and health care costs of Baby-boomers with a shrinking population.  

[Michael Hardner]

22 minutes ago, Moonbox said:

1 That's not really true at all.  Maybe you can say that first-world consumers harm the environment more per-capita, but Canada's footprint is quite a lot smaller than India's.  

2. They can challenge the theory that leads to the necessity, but not really the necessity itself.  We can't support pensioners and health care costs of Baby-boomers with a shrinking population.  

1. Yes, true but our carbon per person is maybe 20X theirs ?  So immigration and increased wealth makes the carbon picture worse.

2. And yet immediate immigration isn't going to solve that problem - it's a bump in the graph

[eyeball]

The old house and single lot (.17 acre) next door just sold for 800K.  It sold for 45K 10 years ago.

The new owners live elsewhere and intend to rent out the place next door.

Our 2.3 acre property with two residences was assessed at less than 800K last year which was an increase of more than 100%.  The wife is making 'lets sell' noises and I guess we could be millionaires if we wanted but then what? Rent the place next door?

It's giving me a headache.

[Michael Hardner]

23 minutes ago, eyeball said:

It's giving me a headache.

Move to the end of the road... must still be cheap there.  

Around here the radius of insane prices is about 4 hours' drive from Toronto.

Elliot Lake, eyeball:

https://www.realtor.ca/on/elliot-lake/real-estate

[Moonbox]

1 hour ago, Michael Hardner said:

1. Yes, true but our carbon per person is maybe 20X theirs ?  So immigration and increased wealth makes the carbon picture worse.

It's not even close to 20x.  I don't think we're even double China, though India it's probably something like 10x.  Regardless, considering the population difference is more than 25x, Canada's footprint here is insignificant by comparison and doesn't really provide any argument against increasing density in Canada itself.  

1 hour ago, Michael Hardner said:

2. And yet immediate immigration isn't going to solve that problem - it's a bump in the graph

Nobody said it will immediately solve the problem, but it at least provides marginal improvement and helps rather than hinders long-term.  

[Dougie93]

I welcome this idiot policy from the bufoonish government on behalf of the Millennial worst generation in human history

the only result is that we land owners will refuse to sell at any price

then the prices will go through the roof from here

we can always access the capital in our properties by line of credit and/or reverse mortgage

the only people who will be screwed are the Millennials who support this idiocy

couldn't happen to a nicer bunch

burn in a fire of your own making, Millennials

we will never sell to you, the government will not save you, so enjoy being homeless forever / shrugs

 

[eyeball]

45 minutes ago, Michael Hardner said:

Move to the end of the road... must still be cheap there.  

Around here the radius of insane prices is about 4 hours' drive from Toronto.

Elliot Lake, eyeball:

https://www.realtor.ca/on/elliot-lake/real-estate

I suspect we'd go our separate ways if we sold.

I'd probably do something stupid like buy a little yacht to live aboard and cruise up and down the coast trying to pick up surf bunnies.

[cougar]

On 4/21/2022 at 10:57 AM, ExFlyer said:

1. Immigration? Are you saying immigrants are the ones driving up housing sales and prices?

2.  Are you insinuating that a person cannot own more than one property?

 

1. Are you saying that governments are not allowing housing development? Maybe it is the NIMBY crowd opposing. Look at the shit storm going on in the York region with government opening green space and the public is outraged.

2. Government red tape is for sure a big factor in development costs. that is a given.

What's up with all those stupid questions?

I give you basic things easy to understand and it is still not getting through to you.

You and Mike should stay after class for additional work on comprehension.

[ExFlyer]

5 hours ago, cougar said:

What's up with all those stupid questions?

I give you basic things easy to understand and it is still not getting through to you.

You and Mike should stay after class for additional work on comprehension.

There are no stupid questions. If questions need to be asked of a comment then the comment is not clear and specific and is vague and pointless.

[cougar]

16 hours ago, ExFlyer said:

There are no stupid questions. If questions need to be asked of a comment then the comment is not clear and specific and is vague and pointless.

Sure.  Your questions remind me of the steelhead questionnaire I received from the Ministry of Forests , Lands and whatever.  After shutting down the rivers for steelhead fishing for me last year, they still wanted to know how many I caught and where.  I left them an eloquent "FY!" that went back to them in Victoria in their pre-paid postage envelope.

[ExFlyer]

7 hours ago, cougar said:

Sure.  Your questions remind me of the steelhead questionnaire I received from the Ministry of Forests , Lands and whatever.  After shutting down the rivers for steelhead fishing for me last year, they still wanted to know how many I caught and where.  I left them an eloquent "FY!" that went back to them in Victoria in their pre-paid postage envelope.

Ouch...what a retort! LOL

An "eloquent FY" when you have no answers.

[cougar]

6 hours ago, ExFlyer said:

Ouch...what a retort! LOL

They should not have asked a question they know the answer of, to add insult to injury.

But not to derail your thread any further, I think capital gains should apply only on investment properties, properties used for business purposes and properties that are not a primary residence or a primary recreational property.

I believe one family / single person may have a primary residence and one recreational property with a maximum defined size.

Capital gains on properties are so difficult to calculate, that the concept is no more than legalized theft by the government.

You have property A, which you bought in 2005 for $100,000.   You invested countless hours of your time to renovate it and spent thousands of dollars for materials and services and since it was you primary residence you did not keep track of these costs.

With inflation going on, your property A in its old shape and form could be sold in 2022 for $280,000 but with the renovation you did, it sells for $500,000.

What exactly are you capital gains ?

Edited April 24, 2022 by cougar

[Michael Hardner]

Why ask tax accountant questions on here?

[cougar]

34 minutes ago, Michael Hardner said:

Why ask tax accountant questions on here?

Because if we do not know the answer of the above, why even bother worrying about it and discussing it in a thread? There is nothing to discuss.

Thought I was on your ignore list, Mike.  Please put me back on the list !

[ExFlyer]

20 hours ago, cougar said:

They should not have asked a question they know the answer of, to add insult to injury.

But not to derail your thread any further, I think capital gains should apply only on investment properties, properties used for business purposes and properties that are not a primary residence or a primary recreational property.

I believe one family / single person may have a primary residence and one recreational property with a maximum defined size.

Capital gains on properties are so difficult to calculate, that the concept is no more than legalized theft by the government.

You have property A, which you bought in 2005 for $100,000.   You invested countless hours of your time to renovate it and spent thousands of dollars for materials and services and since it was you primary residence you did not keep track of these costs.

With inflation going on, your property A in its old shape and form could be sold in 2022 for $280,000 but with the renovation you did, it sells for $500,000.

What exactly are you capital gains ?

There ya go, a very reasonable and thought out comment. Congrats.

[Michael Hardner]

20 hours ago, cougar said:

1. Because if we do not know the answer of the above, why even bother worrying about it and discussing it in a thread? There is nothing to discuss.

2. Thought I was on your ignore list, Mike.  Please put me back on the list !

1. Yes, I see.  Well, you can write off your improvements against the gain I believe.  That would be your answer.  You spent $300K to sell at +$500K so you pay on the $200K difference.

2. When I get bored I sometimes peek at comments.  I have ignored so many people I barely see any posts on here.

[cougar]

8 hours ago, Michael Hardner said:

1. Yes, I see.  Well, you can write off your improvements against the gain I believe.  That would be your answer.  You spent $300K to sell at +$500K so you pay on the $200K difference.

And what about the inflation part of things ?

If you did no renovations that $100K property and then sold it for $280K in 2022, in my view you have no gain, considering all other prices have gone up.  What was $100 before is $280 now.

As for the renovation costs, again they are undetermined as a person was not supposed to keep track of them, because there were no capital gains on primary residences before.  How can one assign monetary value to his / her labor in 2006 or 2010 or 2015 or 2020 - it will be different rates with inflation in mind.

I think they need me in the house of commons.  I will make it so logical and complicated for them, that they will not be able to implement the tax till at least 2047

Edited April 25, 2022 by cougar

[Michael Hardner]

24 minutes ago, cougar said:

1. And what about the inflation part of things ?

2. If you did no renovations that $100K property and then sold it for $280K in 2022, in my view you have no gain, considering all other prices have gone up.  What was $100 before is $280 now.

3. As for the renovation costs, again they are undetermined as a person was not supposed to keep track of them, because there were no capital gains on primary residences before.  How can one assign monetary value to his / her labor in 2006 or 2010 or 2015 or 2020 - it will be different rates with inflation in mind.

M

1. You pay tax on inflation, I believe.

2. 3. You're likely right.

[cougar]

1 hour ago, Michael Hardner said:

1. You pay tax on inflation, I believe.

And wouldn't that be cheating and theft ???

You have your house worth $100K.    They tell you now it is worth $280K, then they ask you to pay 30% tax on the "capital gain" of $180, which would be $54K and this leaves you with $226K.  Did you really gain anything?

You did not.   It was like the government took $19,286 from your original $100,000 and left you with $80,714.

The buying power of the $226K in 2022 will be exactly that of the $80,714 in 2005.

 

[Moonlight Graham]

On 4/21/2022 at 9:24 AM, Michael Hardner said:

1. Very true.  "Demand" includes the many people who want to own many homes and people who want to live in one.
 

How terrible is it that people who want to own more than 1 home are helping to drive up housing costs for profit, therefore people with zero homes can't afford to own a home and have to rent from the former just to live?

I can't believe the # of people with investment properties and basement apartments.  The % of people who rent in Canada must be at all-time highs.  Even a box in a wall (a condo) sells for not insignificant amounts.

[cougar]

19 minutes ago, Moonlight Graham said:

How terrible is it that people who want to own more than 1 home are helping to drive up housing costs for profit, therefore people with zero homes can't afford to own a home and have to rent from the former just to live?

I can't believe the # of people with investment properties and basement apartments.  The % of people who rent in Canada must be at all-time highs.  Even a box in a wall (a condo) sells for not insignificant amounts.

Let's look at the obstacles people face when buying a unit:

1. Credit history

2. At least 3, maybe 5 years on the job

3. Income level sufficient to receive approval from the bank

4. Having the down payment amount of at least 10% of the selling price

If a person is changing jobs often, or is between jobs, or is moving regularly, or works at minimum wage (lots of jobs are like that), or has not saved the down payment amount, or has bad credit, or...........lots of options : the person is left renting which is more expensive than buying.

Can't help but remember my first month in Canada in 2001 - renting a single room in a townhouse off Bloor Street in Mississauga.  The owner (if they were owners) had let 2 more renters like me, each paying $425 / month for a single room, sharing the kitchen and the bathroom with the owner, who had moved into the dusty basement that had no windows together with her 3 little kids ages 4-7.

I imagine you could have one of those townhouses easily with a mortgage payment below $1,200/month, so the landlords were living for free there.  A typical scenario.

Those who are unable to buy get a big kick in life and will be unable to recover from it.  All the money that could have been used as savings and generate a retirement fund is given to the landlord so the latter can have a cozy life and retirement on their backs. 

Our country does nothing to recognize this profound injustice.

[ExFlyer]

9 hours ago, Moonlight Graham said:

How terrible is it that people who want to own more than 1 home are helping to drive up housing costs for profit, therefore people with zero homes can't afford to own a home and have to rent from the former just to live?

I can't believe the # of people with investment properties and basement apartments.  The % of people who rent in Canada must be at all-time highs.  Even a box in a wall (a condo) sells for not insignificant amounts.

Love the sarcasm.

[Michael Hardner]

11 hours ago, Moonlight Graham said:

1. How terrible is it that people who want to own more than 1 home are helping to drive up housing costs for profit, therefore people with zero homes can't afford to own a home and have to rent from the former just to live?

2. I can't believe the # of people with investment properties and basement apartments.  The % of people who rent in Canada must be at all-time highs.  Even a box in a wall (a condo) sells for not insignificant amounts.

1. Well... you are describing 'rental housing' which has served us fine until recently.
2. Not sure about that.  Rents, though, are a problem.