Canadian Money Forum banner

1 - 5 of 5 Posts

·
Registered
Joined
·
6,808 Posts
I think home equity tax is inevitable. The US does it and it seem equitable. Easy rollover to new homes but a tax when people cash out with a substantial deduction. It would finally put an end to the rampant speculation by realtors and their developer partners. I did it a few decades ago. Nice taxfree gains. But being guilty I understand how bad this loophole is. I made many thousands of taxfree dollars by moving regularly.
 

·
Registered
Joined
·
242 Posts
Friends who owned their home for 30 + years in San Jose (Silicon Valley) sold it for 2,380,000 (originally paid about 300,000 in 1988). Of course there are allowable deductions and their accountant advised them they could very reasonably double their cost, for repairs, property taxes, interest, etc over the years. In addition they each were allowed a 250,000 exemption, but they still paid 400,000 in taxes.
 

·
Registered
Joined
·
2,816 Posts
I think home equity tax is inevitable. The US does it and it seem equitable. Easy rollover to new homes but a tax when people cash out with a substantial deduction. It would finally put an end to the rampant speculation by realtors and their developer partners. I did it a few decades ago. Nice taxfree gains. But being guilty I understand how bad this loophole is. I made many thousands of taxfree dollars by moving regularly.
Didn't they tighten up a lot of those rules about buying and selling (or Building and selling in your case?) and what is considered primary residence flipping vs. not? If they didn't, they should. Maybe they didn't, and I just read people complaining about it.

If the tax is deferred when buying a different home, what does this accomplish? Won't reduce speculation or bring in more tax... And when grandma wants to move to Florida and sell, she'll decide to stay instead, driving up real estate prices. And when she dies, the poor kids will lose the house to pay the taxes.

If they really must introduce more taxes (which they DON'T) I'd rather it be a federal property tax than a large property capital gains tax.
 

·
Registered
Joined
·
6,808 Posts
It would not be a straight tax. It would have rollover provisions to protect equity when moving up. There would be a lifetime limit when cashing out (e.g. $250k per person). BTW they do grab equity capital gains from portfolios upon death unlike the US which steps up the value for the heirs.
 
1 - 5 of 5 Posts
Top