Cabbagetown Fixer Upper for $1.8 Million

[Eug]

I'd fully support a capital gains tax on resale values. If I bought my house in 1960 for $20,000 and it's now worth $800,000 in 2009, and I sell it, I should be taxed on the difference, indexed to inflation between those two prices (i.e. profit). $60,000 in 1960 was worth $440,254 in 2009 dollars http://www.bankofcanada.ca/en/rates/inflation_calc.html. Thus, you should be taxed capital gains on the $359,000 profit you made on the house. I suppose there would be some way of deducting the cost of repairs over those 49 years, but there would be a depreciation formula for most renovations, etc.

By taxes profit on resale, you could reduce the property taxes people pay when their home's values shoot up due to monster homes coming into the area, or a new trendiness driving up values.

According to that BOC page, $20000 from 1960 is worth $146752 in 2009. That represents an annual rate of inflation of 4.15%. That means your capital gains would be $653248 after inflation.

So, if you sold your house, you'd be out $300000 to the tax man.

 

[Admiral Beez]

According to that BOC page, $20000 from 1960 is worth $146752 in 2009. That represents an annual rate of inflation of 4.15%. That means your capital gains would be $653248 after inflation.

So, if you sold your house, you'd be out $300000 to the tax man.

Where did you get the $20,000 figure from?

 

[Eug]

Where did you get the $20,000 figure from?

From your post. It didn't make sense to me either, but that's what you posted.

 

[Admiral Beez]

From your post. It didn't make sense to me either, but that's what you posted.

My mistake, I meant $60,000 in 1960, which as I stated above was worth $440,254 in 2009 dollars.

 

[Eug]

So basically, if you wanted to move across town, you'd get $170000 shaved off the top in taxes. Nice.

 

[Admiral Beez]

So basically, if you wanted to move across town, you'd get $170000 shaved off the top in taxes. Nice.

If that meant the property taxes were lowered to a flat level for everyone based on other factors such as use of city services, plus a general city fee to cover schools, roads, etc. then I wouldn't mind it, especially since I'll be living in my Cabbagetown semi until I expire.

 

[Eug]

If that meant the property taxes were lowered to a flat level for everyone based on other factors such as use of city services, plus a general city fee to cover schools, roads, etc. then I wouldn't mind it, especially since I'll be living in my Cabbagetown semi until I expire.

Yeah, so if you became a paraplegic and had to move from a nice two-storey semi to a bungalow to avoid dealing with stairs, you'd have the pleasure of forking over $170000 for that, not including the $30000 in upgrade costs to the bungalow.

 

[Admiral Beez]

Yeah, so if you became a paraplegic and had to move from a nice two-storey semi to a bungalow to avoid dealing with stairs, you'd have the pleasure of forking over $170000 for that, not including the $30000 in upgrade costs to the bungalow.

Yes, but taxes are never a pleasure as you suggest.