May Have Helped Cause Housing Bubble", brought to my attention one of
the primary benifits of a residential capital gains tax: keeping
Vast amounts of tax dollars are missed by people paying contractors
cash, not paying the Goods and Services Tax and, presumably, having
contractors under declare their revenu for income tax purposes.
By allowing people to deduct the cost of home renovations from an
eventual capital gains, there would be a very big incentive for people
to ask for a receipt.
A capital gains tax on homes isn't perfect. For example, do you allow
deductions for property tax? Doing so would favor Ontarians who have
high property taxes that pay for things like health care and
wellfare. On the other hand, not taxing capital gains on homes favours
urban home owners at the expense of rural and small city home owners
who are selling their homes at a loss to move to large centres to find
The residential capital gains tax exemption also encourages the buying
of large lots (the most lkely to net a profit over time; homes require
expensive maintenance, much less so for land ) using up precious urban
land that could be used to build more homes.
Homelessness and urban poverty are caused by low revenu, no doubt, but
they are also caused by a high cost of housing. If the rich spent
there money on expensive appartments and luxury townhouses (row
houses) instead of Mcmansions, there would be more land avaliable for
If the rich invested their money in companies that do research and
development, instead of large tax exempt properties, the economy as a
whole would benefit. Cities would be more affordable and compact, we
would therefor use less fuel to get around them.
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