What’s on Jill’s Mind?  Chapter 1:

Jill Lubinski CNE, MCNE, SRES

How many of you LOVE paying Capital Gains Tax? That’s what some “sources in suits” think will cool this hot housing market in Toronto and the GTA. If the Government gets wind of this, of course they will want to step in and try to fix what ain’t broken in the housing market with another “cash grab”. You know…like the Municipal Land Transfer Tax that does “nada” for “no one”!

Here’s the so-called logic behind this insidious idea:

1.Taxing part of the gain you attracted from selling your principal residence (the difference between what you paid and what you sold for) will dampen the buying frenzy we currently have in the GTA AND even in the surrounding secondary markets (who DO actually have an imminent problem with an overheated market).

2. Not only that, but this tax on your nest egg and personal property will generate about $1.7 Billion in revenue for the government coffers.

These 2 statements are antithetical…How in the hell will this “tax grab” in point #2, generate that kind of income stream when Point # 1 it has just punished and, for sure, discouraged people from buying and selling homes!! This “cooled” market they have just created will, by definition, NOT be able to generate that “as advertised” $1.7 Billion income stream.

And WHY? may we ask, should the government grab a part of the increase in the subsequent higher values of OUR homes…where we have worked so hard to update and improve over the years. We have invested our hard-earned after tax income with NO government assistance, I might add, in our most precious personal asset. This “micro prudential intervention” would be just the government’s way of putting their greedy little hands into our not-so-deep pockets! This type of legislations would have a devastating effect on all Canadian homeowners….not to mention the local economies who depend mightily on the ripple effect of consumer spending and jobs that are created with every Real Estate transaction.

Let the Banks and the Real Estate Industry, who actually understand the basic workings of the housing markets, work together and come up with some helpful solutions that will “protect us from ourselves” when it comes to FOMO overpaying (Fear Of Missing Out). And yes, that includes things like gently raising Mortgage Rates, adjusting Amortization periods, applying stricter qualifying criteria where necessary…whatever might encourage buyers and sellers to calm their respective frenzies and to get back to respecting fair market values, from which we are currently completely untethered!

And god forbid, this egregious policy ever sees the light of day, don’t think for one minute it will ever be repealed in the future, once that market has plateaued. In 1917, where was no such thing as “income tax”. It was introduced as a short term solution to help in the “war effort”. But that was then, and though we are not in a World War today, we are still contributing to that “effort” (which I get, of course).

There are just 2 simple fundamentals that determine whether a housing market is A) a Seller’s market B) a Buyers marke

t or C) a balanced market. Supply and Demand. And when they are out of whack..that’s when we need to make “adjustments” so that a soft landing is assured and the industry can continue to contribute to a healthy economy.

We would LOVE government “intervention” in ONE area, however. In the area of helping developers and builders reduce the amount of RED TAPE and inefficiencies when it comes to giving us what we need in this area. MORE HOUSING SUPPLY.

That’s it. That’s all. For today. Comments welcome. #jillsrant #jillspills #jillsthrills

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