Poll Results: Are Tax Pros in Favour of Anti-Flipping Capital Gains Tax?

It was a close race with our most recent poll question, with respondents torn when it came to the question “Do you believe a potential anti-flipping capital gains tax on principal residences is a good idea?” This was a change proposed in the election and while the majority were in favour, most of the comments were in the negative, here’s what you said:

First to the ‘no’ comments:

“This will be a good step to make houses available for new home buyers.” - Chanan Cheema

“It is the only way to keep housing affordable.” - Gerald Ian Campbell

“I believe a tax should be implemented on flips. Having a time to live in a home can be circumvented.  As well I have seen a team of 4 doing flips. It would only show on land transfer once every 4 years so again difficult to show. Hard to catch but when people are in the flip business it should be treated as such.” - Jacquie Aird

Interestingly, despite it being the minority response, those who oppose this change had the most to say. Here are some of their comments:

“It has already been defined that if a property is defined as a business then there is capital gains.  I do not believe an additional punitive tax is required.” - Maria Robinson

“Definitely not, Tax Trusts like the Trudeau's & the Morneau's, stop going after the little guy, It's time to limit government spending, allow more permits, more houses to be built, once there inventory again, prices will most likely lower, right now here in Toronto, there aren't hardly any homes for sale, hence such elevated prices...” - Daniel Berman

“Due to escalating property values in certain locations it would be beneficial to implement a Surtax on Capital Gains over and above a certain threshold for Principle Residence transactions. Threshold could be based on price averages by specific location, jurisdiction or national survey.” – Terri Halligan

“Not on Principal Residence. This would be a disaster to all Canadian who own houses. Not to mentioned in GTA we have property taxes out of the roof. People purchasing houses don't realize this is burden on its own and is going into 5 K plus for a house about 1,400 SQ." – Krystna Kelpinska

“No! Capital gains on 2nd property is enough.” - Ernesto Jung Viquiera

“A minimum holding period should be implemented (save for some exemptions, eg military, business transfers).   The current tax form already collects information on principal residence sales and this could be expanded to include and highlight incidents of flipping.” - MK Matthews

“The use of the P.R.E,. has already been limited for properties held within a trust. We do not need another layer of taxes levied which the Govt. will undoubtedly waste in any event.”                - Larry H Frostiak

“Need more legislation like a hole in the head.  Flipping already exists in the ITA.  it's called an Adventure or concern in the Nature of Trade.  I guess they've taxed so many things they forgot what they've already done ...  re-runs!” – Alan Rowell

“Do analysis through principle residence exemptions. Cross reference SIN. CRA can see who is flipping.” - Connie Morton

“We need responsible government spending, not more new taxes.” - Robert Kelley

“I don't agree to another tax grab.” - Arthur Pearce

“Yet another tax? No thank you, especially from this current government. Why not just increase the time frame to own a home to something like three years to avoid the Capital Gains tax? Or maybe 5 years with exemptions for service people like our military or the RCMP? This would be far better.” – Ron

“If there is concern about a property being claimed as a principal residence and being flipped for profit, wouldn't a simple solution be to extend the amount of time one needs to live at the property to claim it is their principal residence?  Exceptions could be granted for those who relocate for work (e.g. RCMP transfers for one).  If you have lived at a residence for less than, say 2 years to pick something arbitrary, the property doesn't qualify for the principal residence exception from capital gains.  I'd think that would be simpler than adding another layer of tax.” - Derek T

“Any new tax the government, especially the current one, proposes is suspect.  They seem to try to solve everything by raising taxes.  And they use every creative way to do so that will not immediately look like a money grab.  This is just another money grab by a government with out of control spending. What should be looked at are ways to decrease government spending and lower taxes overall.” - Robert A Litschel

“Flipping houses is and should be a taxable event. Principal residence is exactly that, a person’s home! Flipping houses is a business and the profits from this business need to be taxed. For too long "some" people have been skirting the rules and claiming the principal residence exemption when it should be taxable.” - Chad

“We need to tax short term gains, not tax the inflation of the $ in ling held property.  Do not exceed 50%.” - Virginia E Hoover

“The government already has the means to look into excessive flippings to determine whether the transaction is related to the selling of a principal residence or if the transaction is an adventure in the nature of trade.   What they should do is have a tax slip (which then goes to the CRA) which discloses the gross sale proceeds, the date of sale and the owners (the US already has this).  These would then be reported on theirT1 (Form T2091).  By forcing the disclosure of the sale, the CRA would then have a history of how many times the taxpayer sold a home and can investigate it. They may also consider introducing a holding period before the taxpayer can claim the principal residence exemption.” - Dean Smith

Additional educational resources: Join us on January 19, 2022 for an Advanced Personal Tax Update. Hundreds of tax and financial advisors rely on this annual event to bring them up-to-speed on the most recent details and changes needed for a successful tax season, and 2022 will be another complex filing year.