New tax in the works on the sale of your home

foenix
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Re: New tax in the works on the sale of your home

Post by foenix »

Sparki55 wrote: Sep 13th, 2021, 4:12 pm
foenix wrote: Sep 13th, 2021, 3:38 pm There's seemingly endless changes to the tax code so what's another but that still doesn't raise it from speculation now does it? It seems like another election ploy like how it was used last time.
If last time you mean 2015, yes there wasn't any reason to speculate then.
No I mean literally almost every year......

List of Tax Changes Taking Effect on January 1, 2020

https://www.canada.ca/en/department-fin ... -2020.html
Sparki55
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Re: New tax in the works on the sale of your home

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foenix wrote: Sep 14th, 2021, 11:47 am No I mean literally almost every year.....

Oh, I see now why I didn't understand. This doesn't relate to the discussion. We're discussing specific changes such as the addition of recording one's primary residence sale amount on a personal tax return. The leading reason for them to do that is to analyze how much tax revenue could be brought in under a new tax on primary residences.
foenix
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Re: New tax in the works on the sale of your home

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Sparki55 wrote: Sep 14th, 2021, 11:52 am
foenix wrote: Sep 14th, 2021, 11:47 am No I mean literally almost every year.....

Oh, I see now why I didn't understand. This doesn't relate to the discussion. We're discussing specific changes such as the addition of recording one's primary residence sale amount on a personal tax return. The leading reason for them to do that is to analyze how much tax revenue could be brought in under a new tax on primary residences.
That's more speculation....nothing based on fact. It's another election ploy by the anti-JT crew looking to fling mud on the wall to see if it sticks and it didn't work last time either.

....so this isn't a change in principle residence reporting for 2020?

https://www.canada.ca/en/revenue-agency ... s-use.html

https://www.cibc.com/content/dam/person ... tal-en.pdf
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Rejigger
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Re: New tax in the works on the sale of your home

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foenix wrote: Sep 14th, 2021, 12:25 pm
Sparki55 wrote: Sep 14th, 2021, 11:52 am
Oh, I see now why I didn't understand. This doesn't relate to the discussion. We're discussing specific changes such as the addition of recording one's primary residence sale amount on a personal tax return. The leading reason for them to do that is to analyze how much tax revenue could be brought in under a new tax on primary residences.
That's more speculation....nothing based on fact. It's another election ploy by the anti-JT crew looking to fling mud on the wall to see if it sticks and it didn't work last time either.

....so this isn't a change in principle residence reporting for 2020?

https://www.canada.ca/en/revenue-agency ... s-use.html

https://www.cibc.com/content/dam/person ... tal-en.pdf
I'm curious what your thoughts are on why this Liberal government made this change; having to report the sale of your principal residence on your personal tax return since 2016? Wanna get in on this 'speculation-based-on-facts'?

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kgcayenne
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Re: New tax in the works on the sale of your home

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It was my understanding that this is to have a look at how many people are flipping their ‘primary’ residence the moment that one year is up. When someone is changing residence every two to three years like clockwork, you have to wonder if they aren’t making a business out of house flipping.
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foenix
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Re: New tax in the works on the sale of your home

Post by foenix »

Rejigger wrote: Sep 14th, 2021, 12:34 pm
foenix wrote: Sep 14th, 2021, 12:25 pm

That's more speculation....nothing based on fact. It's another election ploy by the anti-JT crew looking to fling mud on the wall to see if it sticks and it didn't work last time either.

....so this isn't a change in principle residence reporting for 2020?

https://www.canada.ca/en/revenue-agency ... s-use.html

https://www.cibc.com/content/dam/person ... tal-en.pdf
I'm curious what your thoughts are on why this Liberal government made this change; having to report the sale of your principal residence on your personal tax return since 2016? Wanna get in on this 'speculation-based-on-facts'?

~
Well...if I was in a speculating mood, it's been mentioned numerous times by JT and the Libs about flipping principle homes for speculation purposes. I believe before JT's requirement to own a home for at least a year before selling, that rule was in the grey zone. So if I was speculating, I would say the change to the tax code was to have a record of these primary house flippers to see how many times an individual was flipping homes, how many times and how fast.....and not for the ordinary ma and pa that's been living in their homes their entire lives.
In recent years, however, the Canada Revenue Agency has been cracking down on taxpayers who, in its view, are inappropriately claiming the principal residence exemption (PRE), particularly as it relates to flipping houses. If it’s determined that you’re regularly buying and selling homes, you can be denied the PRE, and be taxed on any profits as 100 per cent taxable business income, versus 50 per cent taxable capital gains. Take the recent case, decided in September, of an Ontario couple who bought and sold multiple homes between 2007 and 2012.

The couple, who live in the Ottawa area, bought and sold houses in each of 2007, 2008, 2009, 2011 and 2012 and claimed the PRE to shelter the gain on each sale from tax. The CRA disagreed and sought to tax the income from the disposition of each of the five houses as business income. The CRA also levied gross negligence penalties.........

Note that since 2016, you are required to report all dispositions of a principal residence on Schedule 3 of your tax return, making it much easier for the CRA to review your PRE claim.
https://financialpost.com/personal-fina ... n-in-stone
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Re: New tax in the works on the sale of your home

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kgcayenne wrote: Sep 14th, 2021, 12:53 pm It was my understanding that this is to have a look at how many people are flipping their ‘primary’ residence the moment that one year is up. When someone is changing residence every two to three years like clockwork, you have to wonder if they aren’t making a business out of house flipping.
My wife's, too, all along. :up:

And driving prices up, as in Vancouver when it apparently it peaked in 2016.

Here's an 'archived' example.

"Greater Vancouver House Flipping Declines to Six Year Low"

https://stevesaretsky.com/vancouver-hou ... -declines/
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Rejigger
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Re: New tax in the works on the sale of your home

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kgcayenne wrote: Sep 14th, 2021, 12:53 pm It was my understanding that this is to have a look at how many people are flipping their ‘primary’ residence the moment that one year is up. When someone is changing residence every two to three years like clockwork, you have to wonder if they aren’t making a business out of house flipping.
While that may make sense to some (most?), it's a shallow argument. Considering....

The government has a person's home address - it's on our tax returns. Ergo, they would know when someone moves, assuming the taxpayer fills out their return properly.

They have a whole department that deals with real estate. It's not a small department.

They recognize suspicious activity ("red flags") on tax returns and have for years. They know when people move annually and there are court cases going back years where the government has gone after taxpayers who appeared to be flippers but failed to report their income as-such on their tax return(s).

They don't just take someone's word for it when they report info on Schedule 3, they have people to verify that info - they have ways to verify the info provided with respect to the sale of a principal residence. They could, and have, used those ways, that same technology, to look into real estate sales without having to report on Schedule 3.

It makes sense that people see this change as an introduction, a baby step, towards taxing the sale of one's principal residence because the other reasons given can be disproved.

By the way, moving every 2 to 3 years in this society is no big deal. In the old days, people didn't move around as much, this simply isn't the case now. There are a number of reasons for people to move...

https://www150.statcan.gc.ca/t1/tbl1/en ... 4610004401

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Re: New tax in the works on the sale of your home

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foenix wrote: Sep 14th, 2021, 12:25 pm That's more speculation....nothing based on fact. It's another election ploy by the anti-JT crew looking to fling mud on the wall to see if it sticks and it didn't work last time either.
That's fine if you don't want to agree with the connection. Time will tell :up:
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Re: New tax in the works on the sale of your home

Post by foenix »

Sparki55 wrote: Sep 14th, 2021, 1:45 pm
foenix wrote: Sep 14th, 2021, 12:25 pm That's more speculation....nothing based on fact. It's another election ploy by the anti-JT crew looking to fling mud on the wall to see if it sticks and it didn't work last time either.
That's fine if you don't want to agree with the connection. Time will tell :up:
What connection? It looks like the CRA requirement in 2016 is related to JT's and the Libs' mission to stop the primary residence flipping......not for ordinary joes' primary residence who aren't flipping.........that connection?
Note that since 2016, you are required to report all dispositions of a principal residence on Schedule 3 of your tax return, making it much easier for the CRA to review your PRE claim.
https://financialpost.com/personal-fina ... n-in-stone
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Re: New tax in the works on the sale of your home

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kgcayenne wrote: Sep 14th, 2021, 12:53 pm It was my understanding that this is to have a look at how many people are flipping their ‘primary’ residence the moment that one year is up. When someone is changing residence every two to three years like clockwork, you have to wonder if they aren’t making a business out of house flipping.
That was my understanding too. If its business income, then 100% of the profit is taxed. If it’s capital gains, then only 50% of the profit is taxed.

And if someone is changing residences every couple of years but not changing employers or claiming moving expenses, those are clues to CRA that something is up.
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Re: New tax in the works on the sale of your home

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Miss Maggie wrote: Sep 16th, 2021, 7:10 am And if someone is changing residences every couple of years but not changing employers or claiming moving expenses, those are clues to CRA that something is up.
I've moved 8 times since getting to the Okanagan. 2 times a bought and others I was renting.

Claiming you are moving every couple of years as long as you actually move, isn't wrong. If a new tax penalized people who move often, fix up a place and sell it that's not right. Similar to if a person restores cars on the side and sells one every couple of years, it's not a business it's a family making a little on the side.
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Re: New tax in the works on the sale of your home

Post by Miss Maggie »

Sparki55 wrote: Sep 16th, 2021, 9:12 am
Miss Maggie wrote: Sep 16th, 2021, 7:10 am And if someone is changing residences every couple of years but not changing employers or claiming moving expenses, those are clues to CRA that something is up.
I've moved 8 times since getting to the Okanagan. 2 times a bought and others I was renting.

Claiming you are moving every couple of years as long as you actually move, isn't wrong. If a new tax penalized people who move often, fix up a place and sell it that's not right. Similar to if a person restores cars on the side and sells one every couple of years, it's not a business it's a family making a little on the side.
Sorry, i didnt connect the dots on that very well. I meant that if someone is reporting a sale of personal residence (tax free) every couple of years without the moving expenses or change in employer that might raise an eyebrow at CRA. There’s situations where people move homes but keep the same employment, but CRA looks at a variety of factors when they are deciding who to review or audit.
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Re: New tax in the works on the sale of your home

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"The budget will balance itself."

Yeah, by taxing your house and by confiscating your savings accounts.

Freeland said as much just a few short months ago.


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Re: New tax in the works on the sale of your home

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