Lots of folks accrue their wealth in the value of the home. They depend on the equity in their home for retirement. When they sell the house after a number of years they are usually hoping that they can get a certain return or a certain amount of cash out of their home and take care of themselves in their senior years. That’s all in equity. But it’s not a great idea to rely on your home equity for your retirement since the Canadian government wants to take a chunk of cash when the owners sell their homes.
The government is proposing a new tax on home sales. What a tax would do is just lower the amount of cash available for owners to be able to have after retirement. Tax consultation service in Toronto warns that a home equity tax on the sale of a primary residence could cause Canadian homeowners tens of thousands of dollars.
Is the Idea of Home Equity Tax good?
Home equity tax is absolutely a terrible idea since it would necessarily be something that clashes with the prosperity of the middle class. The tax would be increased not necessarily for the sake of growing tax revenues but just for the purpose of creating an additional burden on certain folks. If this was a good idea and this was going to improve the well-being of citizens then it would not have been opposed by the minister of the middle class.
According to the Canadian tax consulting service, a capital gains tax on home sales could cost homeowners about thirty-six thousand dollars in Ontario and twenty-nine thousand dollars in British Columbia.
Effect on people
The obvious effect of this is people will probably delay the disposition of their properties even longer because they do not want to face any taxes and what may happen is instead of disposing of the property they would just do a reverse mortgage. Couples often manage to make room in a condominium to save up for a place with a yard for their growing children. Any money taken from them in the form of home equity tax would erode their ability to put a down payment on a better home.
Why Expats should take interest in Home Equity Tax?
Apart from the non-residential and other taxes, expats may face home equity tax if they wish to sell their house in a migrated country. Itemizing deductions, such as home mortgage interest deductions can play an important role in reducing their tax liability. If not they might have to move to their native country so they can sell their house tax-free. To get more information check the Accounting and Tax company.
Politicians constantly look for new ways to tax people instead of looking for opportunities to grow the tax base and grow the revenue. So, instead of trying to look at any particular class and thinking of how to increase the tax burden on that particular class, we should find how to increase every individual’s income.
Mansoor Suhail has been providing Accounting, Bookkeeping and Taxation services since 2001 in Toronto, Canada. He is fully competent in Canada and U.S.A tax filings and consultation. He can handle Personal, Small Business, Partnerships and Corporations tax issues with full confidence. He is also able to handle International tax issues for Foreign Students, Expatriates and Foreign Corporations.
