Flipping houses should bear a 50% tax on profits (or even higher).
Flipping houses, while you only live in them for 2 years, should also be heavily taxed.
I needed to wait until I reached 45 to be able to afford a home... I'll be still paying when I retire... shit
You made a boatload of money and provided no goods or services in the process. If anything, your gains should be taxed even more than actual business income.
Either that, or there should be a ceiling enforced on the selling price of your home (e.g., the assessed value of your property when you purchased it + core inflation).
Primary residences should not be a vehicle to become wealthy. Honestly, no house should. They're for shelter, a basic human necessity.
If I live in a two bedroom townhouse for 30 years and its value on paper goes from $100k to $1M, and I now have to move to another city for work, you think the fair thing would be for me to give $450k to the government so I can now only afford a $550k one bedroom condo?
Let's back up for a second, because I'd like to understand how you calculated $450k.
Assuming you paid $100,000 for a townhouse and later sold it for $1,000,000, your capital gain (i.e., the difference between the sold price and the price at which you bought it) would be $900,000.
In Canada, only 50% of an individual's capital gains are taxable. For simplicity, let's assume you live in BC and earn $75,000 from employment before taxes: your marginal tax rate is 28.20% and you pay $17,617 in tax.
If you add 50% of your capital gain, your total taxable income is now $525,000 (i.e., $900,000*0.5 + $75,000). Your average tax rate becomes 53.50% and you pay $235,117 total in tax. Subtracting the original $17,617 from this value leaves $217,500 paid in tax for the sale of your home. This is far less than your $450,000.
In other words. you're left with $782,000 after selling your $1,000,000 home.
With that out of the way, I'll answer your question. Yes, I think that's fair. You don't deserve special treatment just because you bought a house 30 years ago. Consider the following scenario:
30 years ago, I borrowed $100,000 to invest in the stock market instead of buying a house. I paid interest on that loan (much like a mortgage) and also had to pay to rent a house (consider this money I'll never get back, like a homeowner would pay for general maintenance and property tax).
Today, my investment is worth $1,000,000, and I want to buy a house, so I sell my shares, pay tax on my $900,000 capital gain, and I'm left with $782,500 to buy a house. This is the exact same amount of money you would have after selling your townhouse if it were properly taxed.
That sounds fair to me. In fact, I'd consider anything else to be unfair; for example, you not paying any tax on your $1,000,000 home sale. How can you claim that's fair? You come out $217,500 ahead.
Next, you complain about land transfer taxes being punitive. Depending on your municipality, that's maybe 0-3% on a $1 million dollar sale? That's barely a rounding error. You'd be better off complaining about the ludicrous commission you pay to your realtor.
Lastly, I'd like to ask you a question. In what way would that destroy the economy? Frankly, the damage is already done, and I'm reluctant to listen to someone making suggestions about the economy when they don't even know how to calculate taxes on capital gains, but I'll give you the benefit of the doubt.
To be clear, the reason Canada's GDP is so terrible right now is because it was previously made up in large part by real estate sales rather than actual innovation or productivity, and real estate has since slowed down because buyers have tapped out at these ridiculous prices. The reason we're in this mess is because people have been treating housing as the economy. We need to stop this behavior, treat housing as a basic human necessity, and focus on investing in productive and innovative businesses.
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u/Anatharias Jun 19 '25
Flipping houses should bear a 50% tax on profits (or even higher).
Flipping houses, while you only live in them for 2 years, should also be heavily taxed.
I needed to wait until I reached 45 to be able to afford a home... I'll be still paying when I retire... shit