Wednesday, August 10, 2022

Potential home equity tax on primary residences ‘very worrying’ for average homeowners: Taxpayer advocate

Signs that the federal government is considering introducing a potential capital gains tax on the sale of primary residences should be of great concern to Canadians, says the B.C. director of a taxpayer advocacy group.

Chris Sims, British Columbia director of the Canadian Taxpayers Federation (CTF), “We think people really need to pay attention to the potential in the form of a capital gains tax or home equity tax on the sale of your primary residence.” told The Epoch Times.

“So it means that the house you’re living in now, if it’s your only home, when you sell that the federal government is seriously thinking of taxing you a new one.”

Sims paid $250,000 for research conducted by the government through the Canada Mortgage and Housing Corporation (CHMC) to investigate a potential tax on native residences, previously reported Was blacklock reporter last July.

“The aim is to identify solutions that can level the playing field between renters and owners,” the article quoted CMHC spokeswoman Audrey-Anne Coulombe as saying in the article.

The research was conducted by a group called Generation Squeeze through the University of British Columbia’s School of Population and Public Health. Generation Squeeze, a self-described lobby group for young Canadians, released a report on housing affordability in 2019 titled “Straddling the Gap,” describing capital gains from prime housing as “tax shelters” Was. [that] The modernization of housing in Canada is encouraged.”

In the wake of Blacklock’s article, then-CMHC CEO Evan Siddle denied the claim that CMHC was funding a study looking at the home equity tax.

However, Sims said the CTF obtained documents under the Freedom of Information Act that support the claim, including emails between CMHC and Generation Squeeze.

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“Policy adaptations that will attract attention include opportunities for a shift from some current or future taxation of income towards greater taxation of housing property,” it said in an email.

The project’s charter, which was signed by Generation Squeeze and CMHC in March 2020, also directly refers to an examination of tax policy.

“So we have evidence that [the Liberals] thinking about it seriously,” Sims says.

“We think Canadians should be very concerned about this, because the federal government [is] Spending money left, right and center regardless of the fact that they’re driving us deep into debt and deficit spending, and so they’re going to be sniffing for money. “

‘not surprised’

Philip Krauss, an economic analyst and senior fellow at the Fraser Institute, noted in a recent financial post Vaccination Wealth tax is a form of property tax, say capital gains tax on primary homes that is difficult to do in practice.

“It sounds very tempting, but like the property tax, when you really come down to designing it in a way that increases revenue, governments have found that in practice it is very difficult to design something that generates significant revenue. enhances,” Cross said. an interview.

He gave an example of how France abolished its wealth tax after concluding that it would only force the wealthy to flee the country. Germany declared an estate tax unconstitutional, while Austria abolished its wealth tax due to the high administrative costs and burden on small businesses.

Cross says he’s “not surprised” Ottawa is considering ways to increase revenue.

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“I’m sure they’re thinking about a lot of taxes because they have quite a deficit problem to solve and they’re not very interested in solving it through spending sparingly, so automatically There’s going to be a tax hike,” he said.

“There are a lot of challenges with government spending and we must look at ways to slow down. Instead, it looks like we’re going in the opposite direction.”

Income from the sale of a primary residence has always been exempt from federal taxes. Sims said that if a home equity tax is indeed introduced, it could lead to a problem of greater housing affordability.

Capital gains tax on prime residences could take thousands of dollars out of Canadian families – money that could be used to support seniors’ livelihoods after retirement, or help a younger generation pay for secondary tuition, She recently noted in the Toronto Sun Vaccination.

“If homeowners know they’re going to be stuck with a big tax if they sell, they can’t keep up with taking the starter home off the market, and selling it. Or they can buy that new one at the listing price. Taxes can tackle the cost, making the house more expensive,” Sims wrote.

“Shorter supply and higher prices do not make housing more affordable.”

CTF has started a petition Calling on the federal government to drop the plan for the home equity tax, and Sims encourages Canadians to sign it.

“We but we can fight back. We live in a democracy. Politicians are accountable, especially if their jobs are on the line.”

.

This News Originally From – The Epoch Times

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