Post whatever is on your mind!!

[Gabe]

New Jersey governor raising 'millionaire's tax'
The measure, which has been a favored project of the state's Democratic Gov. Phil Murphy for years, would raise marginal rates to 10.75%, from 8.97%, on people with incomes above $1 million. The higher rate is currently applied to those earning more than $5 million.

https://www.nytimes.com/2020/09/17/n...aires-tax.html

[Black Sheep]

If the municipality gets the property tax...which branch gets the land transfer tax? I see this being an easy way for the feds to go deeper into the pockets of home buyers at the time of purchase. Being a one time tax, most people will not put up a stink about it. It’s going to be a shit show for sure.
Time to pack it in and move to a warmer climate country.

[92redragtop]

New Jersey governor raising 'millionaire's tax'
The measure, which has been a favored project of the state's Democratic Gov. Phil Murphy for years, would raise marginal rates to 10.75%, from 8.97%, on people with incomes above $1 million. The higher rate is currently applied to those earning more than $5 million.

https://www.nytimes.com/2020/09/17/n...aires-tax.html

Missed that - so they have the tax bracket already but changed the threshold where it starts. A lot of Wall Street folks (like the Governor's Goldman Sachs pals live in NJ so that will hit their pocket books).

[92redragtop]

If the municipality gets the property tax...which branch gets the land transfer tax? I see this being an easy way for the feds to go deeper into the pockets of home buyers at the time of purchase. Being a one time tax, most people will not put up a stink about it. It’s going to be a shit show for sure.
Time to pack it in and move to a warmer climate country.

It's the province and Toronto already added their piece on top a few years back, so possible to see the Feds add to that.

[Gabe]

Missed that - so they have the tax bracket already but changed the threshold where it starts. A lot of Wall Street folks (like the Governor's Goldman Sachs pals live in NJ so that will hit their pocket books).

Yes, exactly, lowered the threshold to start at 1M per year rather than 5

[Mellow Yellow]

Seeing these types of articles a little too frequently now which means folks in government are looking at it more seriously:



Three ways the federal government may increase taxes on principal residences
TIM CESTNICK

UPDATED SEP 11, 2020 8:55AM EDT - Many Canadians have come to rely on homes for financial security, so a levy on principal residences may jeopardize savings - PUBLISHED SEP 10, 2020 6:07PM EDT
Last week, I wrote about the possibility that our government might look to tax principal residences in some way. Here are the facts that we have working against homeowners: 1) The comments of those who are advising this government on housing wealth and inequality have revealed an attitude that many Canadians have “won the lottery” with the value of homes increasing so much, and that the glorification of home ownership is a “regressive canard”; 2) the principal residence exemption has been abused by some in the past who have claimed it when perhaps they shouldn’t have; 3) the homes of Canadians represent their largest store of value for most people; and 4) the support provided by the government during this COVID-19 pandemic is almost assuredly going to mean tax increases in the future.

The question then becomes: What might the government do to increase taxes on principal residences? I think there are three possibilities.

THE U.S. EXAMPLE
The first possibility is that the government may introduce tax rules similar to those in the United States. South of the border, there’s a limit on the gain on the sale of a home that can be sheltered from tax. Specifically, there is a US$250,000 “exclusion” (that is, exempted from tax), which is increased to US$500,000 for a married couple filing jointly.

There’s another catch here. To qualify for the exclusion in the U.S., you have to have lived in the home for two years out of the last five years leading up to the sale of the residence (there are a couple of other tests that must be met, but they’re generally not an issue for most U.S. taxpayers).

Further, if a taxpayer in the U.S. owns more than one residence (a city home and a cottage, for example), they can’t simply choose which residence should be sheltered from tax. There’s a test that must be applied to determine which of the properties was really the “main home." In Canada, we can designate any eligible property as our principal residence, albeit we can only fully shelter from tax on one property for each family unit.

As an aside, if you’re a U.S. citizen or green-card holder living in Canada and you own your Canadian home, a sale of your home may currently be tax-free in Canada but may be taxable in the U.S. So, speak to a tax professional about this.

Now, there’s also the issue of mortgage interest. In Canada, we can’t generally deduct it. The government’s rationale is that we don’t generally pay tax on the sale of a principal residence, and so there shouldn’t be a deduction for interest to buy the place. If the government were to start taxing principal residences, you might expect that we’d be entitled to deduct our mortgage interest – but don’t hold your breath.

Taxpayers in the U.S. can deduct mortgage interest on up to US$375,000 of debt (US$750,000 for a married couple filing jointly). The limits are higher (US$500,000 and US$1-million, respectively) for mortgages taken out on or before Dec. 15, 2017. There are other limits, too, that can apply in certain situations.

Allowing mortgage interest deductibility is not guaranteed if our tax rules change here in Canada. In fact, I’d be surprised if we were granted this benefit, because it would mean a loss of tax revenue in the short term, which the government might make back at the time a home is sold – potentially years down the road.

THE WEALTH TAX
Rather than simply copying the approach in the U.S., our government could introduce a wealth tax. This type of tax is common in several European countries (France, Spain, the Netherlands, Norway, Switzerland and Italy come to mind). In some cases, the wealth tax has morphed into a tax on real estate alone. In France, for example, the rules changed in 2018 to exclude financial assets and to only tax real estate with a value of €1.3-million ($2-million) or more.

Wealth taxes generally range from 0.5 per cent to 1.5 per cent of the value of the assets being taxed. Could something similar be introduced in Canada? Well, it’s being done at the municipal level already. Property taxes are something all homeowners are generally familiar with. It wouldn’t be difficult to add a federal tax to a system already being administered by municipalities across the country.

THE GST/HST
Currently, the goods and services tax (or harmonized sales tax) is paid by purchasers of new or substantially renovated homes in Canada. Even resale homes can be subject to GST/HST if the property was used primarily for business purposes. It wouldn’t be difficult for our government to collect GST/HST on the sale of all homes, and to change the rules around GST/HST rebates currently available.

There are, of course, problems with all these taxes. That will be a debate for another day.

I have been saying for years the Canadian government was getting ready to tax home sales.

Several years ago they mandated the reporting of the sale of your personal residence. By implementing this, they started collecting data to determine how much tax they might be missing out on.

BTW if you don’t report the sale of your house there are penalties.

[92redragtop]

I have been saying for years the Canadian government was getting ready to tax home sales.

Several years ago they mandated the reporting of the sale of your personal residence. By implementing this, they started collecting data to determine how much tax they might be missing out on.

BTW if you don’t report the sale of your house there are penalties.

Yes, this was just about 3 years ago I think? The mandate to report sales on your tax returns is a transition to eventual taxation (which they did not say out loud...lol).

[Foxstang]

Time to be a renter and work under the table lol

[ZR]

Cooler nights but still some pretty nice days, lovin it.

[Laffs]

Love the first call of the day being

Driver : "How much oil pressure should this truck have?"

Me : Uhhh one sec let me check what the manufacturer says, at idle guessing 15-20psi?

Driver : "Sure, so the gauge should definitely read some then eh?"

Me : ..........

Driver : "Like zero isn't good right?"

Me : .........

Driver : "If I floor it it goes up a little is that ok?"

Me : Please stop driving it...I'll come out there

Driver : "OK"

20 minutes later

Driver "Hey I know you said stop driving it but I was idling it for the radio and now it's making a funny noise"