Mulroney took away the capital gains exemption on rental property. Ever since, there has been a fundamental unfairness in the income tax system.
Some people become millionaires thanks to their homes and don't pay one red penny in income tax. Those people are not in Atlantic Canada, Manitoba or Quebec. Those people are in Ontario, Alberta and BC.
The USA has a capital gains tax on homes. There is a huge exemption ($250,000 per person), but at least people don't become millionaires tax free.
On the other hand, thanks to Mulroney, every dollar in increased value of rental property is subject to income tax.
I haven't crunched the numbers, but I'm guessing that the capital gains tax exemption on homes is a larger regional subsidy to Ontario, Alberta and BC than the equalisation payments that the Federal Government dishes out to the other "have not" provinces.
-If I Ran Canada
-Liblogs Parasites
4 comments:
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Wow, what a joke. You want to discourage liquidity in the home market?
This has got to be one of the worse policies ever.
If I can write off the depreciation of my stereo, all my clothes, my car, my furniture, and up keep to my home I would gladly give up the exemption.
That would truely level the playing field.
But it would also make our tax form 50 pages long.
Do you want that?
Anonymous, what do your stereo, clothes, your car or your furniture have to do with profit on your house?
Stocks have capital gains tax, do they suffer from a lack of liquidity?
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