Updated: May 10, 2021
Taxing homeowner profits could cool down home prices — but at what cost?
Whenever Canada’s real estate landscape is being reshaped by seismic levels of buying activity, calls inevitably grow louder for some form of government intervention to put the brakes on home prices.
Careful what you wish for.
Past attempts to cool housing markets — a tax on vacant homes in British Columbia, a “foreign buyer” tax in Ontario, the nationwide mortgage “stress test” — have failed to keep prices in check, leaving Canada’s provincial and federal governments with few options.
One strategy still on the table is reducing, or outright cancelling, the capital gains tax exemption on Canadians’ primary residences.
It’s a change that doesn’t seem likely to happen. But if it does, it could cost homeowners thousands — if not hundreds of thousands — of dollars.
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