Opinion: The taxman is coming for our homes

financialpost.com:

By Lawrence Solomon

Canadian governments, which need ever more revenue to finance their spending, have been targeting what they traditionally viewed as Canadians’ most undertaxed assets: their homes. The upshot: Governments have been filling their coffers at the expense of homeowners, relieving them of their cash and sometimes their homes.

The federal government’s recent increase of the capital gains inclusion rate to 67 per cent of gains above $250,000 may be the best known, and most painful, of the new levies besieging homeowners. A modest family cottage that might have cost $20,000 when purchased in the 1960s might have a value today over $2 million, representing a capital gain of $2 million or more, with roughly $1.3 million of that now taxable. If the children who inherit it pay tax at the top marginal rate, they’ll owe roughly half that amount — almost $650,000. If they can’t come up with the money needed to satisfy the tax man, the family cottage will need to be sold, ending traditions and a bedrock of family cohesion that had spanned generations.

Airbnb and similar renting platforms, which enable homeowners to rent out some or all of their homes for short stays, have also become a money machine for municipalities, which are forcing renters to obtain licenses and pay annual fees that can amount to $2,000 or more. Some municipalities also impose an occupancy tax on renters that homeowners are required to collect. In Toronto, the occupancy tax boosts the rental fee by six per cent. And Ottawa and Queen’s Park take their cut, too, as HST is levied on both the occupancy tax and rental fee.

Governments clearly benefit by forcing homeowners into the formal rental economy, but homeowners don’t. Even owners who only