Canadian Federal Politics Thread v5

[Slava]

Originally Posted by Leondros

At the end of the day its really going to impact deemed dispositions upon death the most that you can't exactly tax plan for death. I mean you can - gift away early, but that's about it.

Massive gains on real estate could also get impacted as well. Think Vancouver and Toronto long term rental holds that have appreciated by millions over the past 2 decades. Flippers still may skirt under the $250K on a year-by-year basis depending on how long they are holding for.

Right but you also have LCGE you can use (which is now $1.25m and indexed going forward).

I’m on record many times on this forum saying how I hate capital gains taxes, but the reality is the government needs money. There’s no way anyone is feeling too sorry for people in these scenarios. The biggest risk is having the very wealthy people move to lower tax regimes, but otherwise it’s politically not a brutal strategy.

[Leondros]

Originally Posted by Slava

Right but you also have LCGE you can use (which is now $1.25m and indexed going forward).

I’m on record many times on this forum saying how I hate capital gains taxes, but the reality is the government needs money. There’s no way anyone is feeling too sorry for people in these scenarios. The biggest risk is having the very wealthy people move to lower tax regimes, but otherwise it’s politically not a brutal strategy.

LCGE is such a small scope its really not even worth pointing out and really doesn't apply to most people. The main qualified asset being Qualified small business corporation shares which most people would not hold unless they are small business owners meeting the definition of a CCPC.

[GullFoss]

Pretty interesting to watch as Trudeau blatently risks the country's financial footing in order to stay in power. Pretty disgusting and morally repugnant IMO.

Having grown up with Mulruney, Chretien, Martin, Harper and Trudeau...this is definately an eye opening experience to watch someone do this.

Is this what his father was like too?

[RandyHolt]

On the personal side I don't think the capital gains inclusion rate is going to be a big issue save for second property sales, but on the corporate side it is going to have a larger impact.

Any successful small businesses, holding companies or incorporated professionals with investments in a corporation are going to be impacted by the new tax rates. It's right on brand with this government to do something that looks good politically but is bad tax policy.

If they wanted to change the capital gains rate, they should have just changed it to 2/3 inclusion all around. Your average individual has a hard time using all their RRSP and TFSA contribution room each year, so I'm not sure why there is any personal exemption much less $250,000 per year.

[Zary's-Mustache]

Originally Posted by fotze2

I have no idea but there is a poster called BanfuzzfromCP watching this thread which is hilarious.

There is also a poster named freepasspepsifree who visited my profile for some reason

[Slava]

Originally Posted by Leondros

LCGE is such a small scope its really not even worth pointing out and really doesn't apply to most people. The main qualified asset being Qualified small business corporation shares which most people would not hold unless they are small business owners meeting the definition of a CCPC.

Yeah small businesses and farm property (and I guess fishing property). But it applies to quite a lot of people. A lot of people own small businesses.

[PepsiFree]

Originally Posted by Zary's-Mustache

There is also a poster named freepasspepsifree who visited my profile for some reason

Now I need to know what the free pass is for!

Maybe they want to give me some movie passes or something.

[Zary's-Mustache]

Originally Posted by PepsiFree

Now I need to know what the free pass is for!

Maybe they want to give me some movie passes or something.

Or maybe a hall pass.

[Mathgod]

Originally Posted by Winsor_Pilates

I've read this a few times on CP. Any source to private equity firms buying up all the housing?

"All the housing" was hyperbole, but they are definitely buying up a big chunk of it. And why wouldn't they? They know that reducing available supply will cause prices to soar, which means a handsome return on investment.

https://www.theglobeandmail.com/busi...ada-data-show/

https://www.cbc.ca/news/canada/briti...a-bc-1.6743083

https://betterdwelling.com/canadian-...h-cheap-money/

https://betterdwelling.com/canadian-...-by-investors/

https://globalnews.ca/news/7950579/d...ousing-market/

[PepsiFree]

Originally Posted by Zary's-Mustache

Or maybe a hall pass.

Everybody wants a piece.

[Winsor_Pilates]

Originally Posted by Mathgod

"All the housing" was hyperbole, but they are definitely buying up a big chunk of it. And why wouldn't they? They know that reducing available supply will cause prices to soar, which means a handsome return on investment.

https://www.theglobeandmail.com/busi...ada-data-show/

https://www.cbc.ca/news/canada/briti...a-bc-1.6743083

https://betterdwelling.com/canadian-...h-cheap-money/

https://betterdwelling.com/canadian-...-by-investors/

https://globalnews.ca/news/7950579/d...ousing-market/

So you meant investors when you said private equity firms?
That's a pretty big difference

[Whynotnow]

Every tax increase has its fangs and downsides, I expect this one will touch me at some point but honestly I was expecting something worse. It will suck worst for estates as thye can’t really manage this to blunt it. For most people if you have this amount of gains in stocks either the increased tax really isn’t that material or you should be able to manage timing. For those with a massive gain in another property I’m having a pretty tough time garnering a ton of sympathy there, as that’s been quite the return.

Small businesses, probably farmer are the worst affected and not sure what they will be able to do to avoid getting hit by it.

[GGG]

Originally Posted by RandyHolt

On the personal side I don't think the capital gains inclusion rate is going to be a big issue save for second property sales, but on the corporate side it is going to have a larger impact.

Any successful small businesses, holding companies or incorporated professionals with investments in a corporation are going to be impacted by the new tax rates. It's right on brand with this government to do something that looks good politically but is bad tax policy.

If they wanted to change the capital gains rate, they should have just changed it to 2/3 inclusion all around. Your average individual has a hard time using all their RRSP and TFSA contribution room each year, so I'm not sure why there is any personal exemption much less $250,000 per year.

If you lowered it to no exemption you’d be raising taxes on all groups. Yes you’d be raising it on a small amount of income but you couldn’t say that the tax increase only affects .13% of earners. You’d also be taxing the elderly which is generally bad before an election.

In the P90 and below salary category the value is very minimal with only 2.4% of income being earned through capital gains. But if you parsed the numbers by age I would bet you’d find lots of elderly couples pulling 20% of their income out of gains on 40k per year each incomes.

Now is this good fiscal policy? Probably not as taxing all people with gains more probably makes a lot of sense especially old people with gains. But that’s not politicaly palatable.

[Mathgod]

Originally Posted by Winsor_Pilates

So you meant investors when you said private equity firms?
That's a pretty big difference

Homes can be bought anonymously by using numbered companies. So now it becomes a question of do you really think it's small time domestic investors buying up housing, or huge corporations with mountains of capital at their disposal?

As an example (yes this is a US example, but it illustrates the point) look at Blackstone, which made a cool $7 billion from its investment in Invitation Homes.

[chemgear]

https://twitter.com/user/status/1779557729629073660

https://twitter.com/user/status/1779565389736710403

https://twitter.com/user/status/1779570928139080189

[Leondros]

Originally Posted by Mathgod

Homes can be bought anonymously by using numbered companies. So now it becomes a question of do you really think it's small time domestic investors buying up housing, or huge corporations with mountains of capital at their disposal?

As an example (yes this is a US example, but it illustrates the point) look at Blackstone, which made a cool $7 billion from its investment in Invitation Homes.

You cannot use a US proxy for this sort of thing. You may as well use the UK, Australia, or Germany.

[Winsor_Pilates]

Originally Posted by Mathgod

Homes can be bought anonymously by using numbered companies.

No they can not.

So now it becomes a question of do you really think it's small time domestic investors buying up housing, or huge corporations with mountains of capital at their disposal?

It is the average domestic investor.

[photon]

Originally Posted by PepsiFree

Now I need to know what the free pass is for!

Maybe they want to give me some movie passes or something.

We banned them but you're still here running amok. Or that's what the endless harassing emails and vexatious registrations say.

[Patek23]

Nvm

[Leondros]

Originally Posted by Patek23

How is that possible if they claim only 0.13% of Canadians will be effected. Or is that just BS

I don’t know their assumptions. But I can tell you as a Chartered Accountant a lot of estates will be impacted at some point.