Poll Results: Is the New House Flipping Tax a Concern?

Beth Graddon

For the second consecutive month, participants of our June poll went head to head with results split almost down the middle. The controversial topic discussed: “Are your clients concerned they will lose their principal residence exemption due to the new house flipping tax?”. Just over half of the tax and financial professionals polled said “yes”, yet most of the comments came in from the no “side”. Here are some of their comments:

“The only ones complaining are house flippers who use the renovation time as their principal residence and are living elsewhere to meet the time requirement.” - Gerry Campbell

“No. Most if not all of my clients are not in the “house flipping” business. Their major concern is that the current federal government’s voracious appetite for taxation money caused by over-the-top spending will result in capital gains or an even worst money grab on all houses.” - Lyle

“No, our clients are already aware of the tax implications of house-flipping and using the principal residence exemption as a “tool.”  If they’re going to be flipping houses, we incorporate them as an active business and structure their tax picture - same as any other business.” – Alan Rowell

“No, my clients do not know about house-flipping. They are, however, concerned that one fine day soon the sale of one’s principal residence is going to migrate from the back of the Schedule 3 to the front and we will be taxed on any gains from the sale of our homes.” - Mitzi-Lynne Morgan

“Most of my clients believe they will be unaffected by this.  Some, as was mentioned by another responder, do not really understand what it is all about.  There should be a “home flipping” clause in the tax code already.  The CRA would call this a “business” and tax accordingly.  The problem would be that it is not getting reported or is underreported.  That is what needs to be looked at.  Not specifically, primarily residences.” - Robert A Litschel

“Only two or three are concerned about this, and they are builders - the exact people who are SUPPOSED to be caught by the new rules.  Other than that, many clients don’t know, understand, or even believe they must report the sale of a house/home - no clue that it’s only due to the principal residence EXEMPTION they don’t have to pay tax every time they sell their home.  Some get irate when I explain the concept to them - they think it’s outrageous that the government should even ASK about the sale of a house, no matter whether it is a principal residence or not.  Others believe that those who have enough money to buy and sell houses are too rich and never pay taxes anyway.” - Nelson Selinger

“Many are unaware of any changes. None of my clients would be affected anyway.” - Michael Connors

“Most of my clients have lived in the same home for a number of years. Those who do move frequently tend to rent, rather than buy and sell houses. So, the house flipping tax really does not affect most of them.” – Daniel

Thanks to everyone who weighed in! This month we’re asking: “Are you or your clients finding it more difficult to hire skilled people this year?  What are the reasons for this?”