In a country with some of the world’s most expensive real estate, Prime Minister Justin Trudeau’s government wants housing to become more affordable.
In a country with some of the world’s most expensive real estate, Prime Minister Justin Trudeau’s government wants housing to become more affordable.
Canadians are using real estate as their retirement nest eggs. That means they’re investing less in productive businesses and are woefully under-diversified. Reducing/removing the capital gains exemption on real estate sales would encourage actual investment.
Shit, when was such an exemption passed? That’s literally a law that turns housing into a non-productive investment.
Making a necessity to live in the modern world an investment is the way to turn a portion of the population resentful and unproductive.
Googling around, all I can find is that Canada didn’t have a capital gains tax until 1972. I think that means all investment profit was tax free.
To be fair, the reason they’re using it for retirement is because every other method (defined-benefit pensions, defined-contribution pensions, bonds, mutual funds, RRSPs) have been systematically broken by the wealthy.
The dotcom bust, and the lesser extend the 2008 crisis, wiped out a lot of Boomer and elder-Xer equity. Real estate was the next thing that “weath advisors” pushed after they ran the other options into the ground.
If people could retire with dignity and security, we probably could have headed off some of the early stages of the real estate speculation boom. Of course, that would have required rich people to make less money, or face some kind of consequence. As it stands, the economy suits them just fine, even if it fails everyone else.
Those people will also need to factor in how much housing is causing localized inflation which is eating into their monthly cash flow. Unless the person has a rather large real estate portfolio they could defer the burden to I don’t think the current situation is going to work out well for most single dwelling owners unless they plan to move away soon.
As someone who struggled to get into homeownership in vancouver area it not about investment by candians. you are actively bidding on homes where asian investors trump your offer by 100K without even seeing the property. And the vacancies are bad. Two of my friends rent small basement suite in a giant home. The asian owners have not lived in the rest of the house for 2 years. So an entire family is denied housing for an investor to just sit on the property…not a canadian nest egg.