Here are some excerpts from a report in the National Post by Olivia Rumbell, which focuses on how the higher tax is prodding some people to sell homes before the tax is implemented.
The new capital gains tax proposed in the Liberal budget has led to speculation that there might be a flood of cottages entering the market or a push for earlier closing dates as sellers try to avoid a hefty tax bill. “I am seeing an increase in people wanting to list their properties now that this is going into effect,” said Beth Groom, a broker and owner of Cape Breton Realty. The capital gains tax, if it comes into effect, would tax profits on capital gains of more than $250,000 at almost 67 per cent, up from the prior rate of 50 per cent. It would result in an increased tax bill on capital gains for some sellers. …Groom speculated that if she was working for the buyer, she’d put in an offer for a certain amount, closing prior to the June 25 date when the capital gains tax will come into effect, communicating clearly so that the seller knows if they close before that day, they may save money.
For what it’s worth, I’m not overly worried about the impact on homeowners (though it’s unfair for them to be hit by an extra layer of tax).
What matters a lot for long-run prosperity is innovation and business investment. And Trudeau’s class-warfare grab for money is going to discourage those things.
Given the Tax Foundation’s comprehensive formula, I don’t know what it will do to the overall tax rate on capital income, but it definitely will move in the wrong direction.
Why is Trudeau pushing bad policy?
Given that a previous class-warfare tax hike backfired, he should have learned.
Dan Mitchell is co-founder of the Center for Freedom and Prosperity and Chairman of the Board. He is an expert in international tax competition and supply-side tax policy.
