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Joined 1 year ago
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Cake day: June 12th, 2023

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  • Do you realize that 67% does not refer to the tax rate, but rather the amount of capital gains that are taxed as income? Meaning that the remaining 33% are always completely tax free?

    Example: you sell an investment property for $2,000,000 which you had previously bought for $1,000,000. Your annual salary is $75,000.

    In this example, of the $1,000,000 capital gain, 50% of the first $250,000 ($125k) is taxable and 67% of the remaining $750,000 ($500k) is taxable. So, add $625k to your salaried income of $75k and your total taxable income is $700,000.

    The total income tax you would pay after the proposed increase (assuming you live in Ontario) is $342,103, which is $320,405 more than you would have normally paid on your salary of $75,000. Therefore, your effective tax rate on the $1M capital gain is roughly 32%, not the 60% you mentioned in your comment.



  • It really seems to me that municipalities simply don’t have the resources to support housing. Housing is a national problem and leaving it up to municipalities only creates perverse incentives to drive people experiencing homelessness out of your community into another, which isn’t doing anything to solve the underlying problem. We need a national housing first program, but this story demonstrates the importance of getting it right.

    Governments should also be building public housing, like yesterday. People scapegoat landlords a lot but they are also subject to the laws of supply and demand. The only two levers the government has are to decrease demand (e.g. cracking down on short term rentals, stunting our economy by limiting population growth) and increasing supply (e.g. zoning in the missing middle, building affordable public housing).