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Comment by Ensorceled | Hacker News Reader

> I'm an idiot, but I struggle to see how significant taxes in these cases wouldn't have extremely broad appeal.

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.

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> It would have broad appeal, but not to the developers etc. that are buying 10K plates at fundraising dinners ...

Definitely true and thought it would go without saying haha

The rest of your post is totally fair and I can't really disagree.

The CRA is fairly particular[0] about income from the sale of a property. They want to know, for example, how long it has been your primary residence and if it was rented before then, what was the appraised value. You will end up paying capital gains on the delta. So, if you've been renting out a property, move in to it for 6 months and then sell you'll be paying capital gains on everything but the last 6 months. The only time that works out is with a sudden spike in values.

[0] source: an accountant I know that wants to stay in good standing with the CRA :-)

The point is that you have changed your principle residence to the new property and, hence, it is not taxed on sale.

"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 scenario allowed in your reference is not the same. The original scenario was a rental/income property declare principle (for some short period of time) for the purpose of shielding capital gains whereas the exemption you reference is a principle residence allowed to be used for rental/income. Note that you cannot declare another property as principle while you're renting out your homebase. I expect it is meant for cases where you might take a job transfer for a period of time.

The taxman never leaves money on the table.

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