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You’re no longer middle-class if you own a cottage or investment property
(www.theglobeandmail.com)
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Couldn’t read the paywalled article, but most of the commentary on social media seems to be people that completely misunderstand how their taxes on capital gains are calculated, like thinking the inclusion rate is how much tax is paid, or think that paying capital gains on a secondary property is a new thing. Really it’s paying around 8% more in taxes on the gain over $250k. Some think they’re getting taxed on the whole sale price, not just the increased value, some seem upset that they’re taxed on the “investment” that was bought with after tax dollars(even though capital gains is taxed lower than things like a regular investment account). Some think it’s somehow unfair to pay the capital gains on what they consider their retirement plan, even though they have the same option to put those gains into an RRSP to shelter it from taxes, they’re paying a lower inclusion rate than regular income.
One thing that seemed to come out that didn’t change much and seems a big deal to some, is if you want to pass the property to next of kin, make sure your estate is sitting on 25% of the increased value of the property to cover capital gains, or use a trust and pay the gains up front(though this just puts it off so the kids pay more gains to pass it to their kids) before it hits the estate.
Somehow I got lucky and the paywall disappeared on refresh. My takeaway was that we should make the capital gains on investment real estate (I'm assuming anything other than principal residence) be taxed at a 100% inclusion rate. Part of the reason is that most of the people seeing these gains are at the age where they're starting to require a higher share of government spending while earning less from employment, so it's reasonable for them to pay closer to their share of taxes.