I think people are missing the fact that for many Canadians values of their homes represent their live savings. So while homeownership remains high in Canada doing something substantial about re prices would ruin peoples lives.
We need to take speculation out of the marketplace.
I'd also like to see a ban on corporations purchasing private homes and significant tax increases on non principle residences.
This would actually solve the problem (the calls are coming from inside the house- foreign investment is merely a scapegoat), and as such it won't be done.
But any step forward is a win.
Thank your MP and ask them to solve the next problem: Canadian corporate ownership.
The principal residence tax exemption is also a joke but I also understand it's political suicide to try and get rid of it and at this point, since so many people have their life savings tied up in real estate, you'd probably be causing more problems by removing it.
It would have broad appeal, but not to the developers etc. that are buying 10K plates at fundraising dinners ...
> The principal residence tax exemption is also a joke
The problem is that without that exemption, you literally can't afford to move. The 6% "tax" for real estate fees are already painful if you are trying to move to a house of the same value in another city, but if 40-50% of your sale value was considered a capital gain ...
The real problem is people "moving into" rentals for 6 months and then declaring that their principle residence and selling the property. Once you start renting it should be forever be a business property.
Definitely true and thought it would go without saying haha
The rest of your post is totally fair and I can't really disagree.
[0] source: an accountant I know that wants to stay in good standing with the CRA :-)
"When you change your principal residence to an income producing property, such as a rental or business property, you can make an election not to be considered as having started to use your principal residence as a rental or business property. This means you do not have to report any capital gain when you change its use. "
https://www.canada.ca/en/revenue-agency/services/tax/individ...
The taxman never leaves money on the table.
For real estate this means keeping the property ready to sell at any time. It is easier to exchange an empty apartment and even easier to exchange an empty plot than a rented out apartment.
The downsides of renting out, i.e. the inability of being able to quickly sell the property must be compensated and that compensation is part of your rent. If you cap rent, that compensation will be insufficient to "bait" the property owner into renting his property out. They would rather keep it liquid and wait for a better offer. To keep it simple, the owner has options, the renter doesn't, so the renter must go out of his way to attract the owner's attention by paying higher rent than if he had outright owned the property himself.
Eliminating the liquidity preference of land would require all land to be leased or a sufficiently high tax on owned land (so that waiting and doing nothing has opportunity costs).
For non-primary residences? Sounds pretty good to me!
Every age group, including the youngest (18-25) have a higher rate of home ownership than 20 years ago.
The issue becomes people with existing outstanding mortgages. If we considerably reduce house values, would outstanding mortgages need to be reduced pro-rata? Who would 'eat' that cost? The government? The bank?
Canadian Real Estate is pretty clearly in bubble territory. Something can happen now or later, but it only gets worse with time.
Let's ignore the property itself, which is a depreciating asset which was built and can be improved through manual labor.
That land is going to stay the same no matter how much you pay. Paying more for the same plot of land doesn't make it better. You don't get a bigger plot or a plot of better quality by spending more on the land. The land isn't wealth, it's the community around the land that gives it value. If you have demographic problems, your land is going to be worthless because the community is too old and shrinking.
Betting on ever growing populations is a pyramid scheme by the way.
it has been a good bet in the past. Whether it remains a good bet is unknown - that's what makes it speculative. However, i don't see the population declining within the investment time period of a typical person buying the home.
Just in case, I do own the house.
1. It'd suck for me if house prices went substantially down.
2. It is nevertheless absolutely positively the right same thing for society.
The assumption that house is mandatory, can be your main retirement or even only plan, and prices can only go up is crazy and unsustainable. Pain is coming and I see no reason to keep making it worse while enriching people in undeserving ways.
This was my opinion for 20 years,from poor university student to renter to condo owner to house "owner". But I come from Europe so my brain can grok the notion of "you don't have to have a massive house. You just don't". This may sound insulting but my wife is love of my life, born Canadian, and cannot comprehend not having a house, having a family without a house, or that prices can go down. It's like seeing ultraviolet - no matter how much she squint she's not physically equipped :-)
If you purchased a home that someone who had less money wanted is that stolen property?
Can I have your computer, phone and your car. I don't have any money but you having something I want means you stole it.