Taxpayers need action against a home equity tax

Author: Franco Terrazzano 2022/06/19

Politicians think we should trust them just because they pinky promise not to impose a home equity tax, but Canadians pay members of Parliament to do more than talk a good game.

MPs need to prove they won’t bring in a home equity tax by scrapping the requirement to report the sale of our home with the government. 

A home equity tax would mean a lot of pain for a young couple looking to upgrade to a family home or for grandparents who are relying on the equity in their home to fund their golden years.

For example, Canadians that bought their Toronto home for $250,000 in 1980 and sold it for $1.2 million today would pay between $51,750 and $190,000, depending on how a home equity tax would be implemented.

Right now, you don’t pay tax on the money from the sale of your home. But homeowners need to stay on guard because a reporting requirement sets the stage for a home equity tax. 

In 2016, the government started requiring Canadians to report the sale of their primary residence even though it’s tax-exempt. If you sell your home, the Canada Revenue Agency wants to know how much money you received from that sale. But, if the taxman isn’t taxing it, then why is the taxman asking that question? 

The Official Opposition called on the Trudeau government to remove this reporting requirement.

“It’s time the NDP-Liberal government walked the walk rather than just talking the talk about denying their plans to implement a home equity tax,” reads the statement from Conservative MPs Jake Stewart, Matt Jeneroux and Gérard Deltell. “Introduce legislation that removes the requirement to report your primary home sale to the CRA.”

That’s a good start, but Conservatives should take their own advice and walk the walk by introducing a private member’s bill to remove the reporting requirement. 

Taxpayers also shouldn’t accept pleasantries from Liberal MPs.  

“The Liberals have no plan to ever introduce a home equity tax on primary residences,” said the office of MP Terry Beech to a Canadian Taxpayers Federation supporter.

If Liberals want Canadians to believe the Trudeau government isn’t coming after our homes, then the government should stop acting like it’s considering a home equity tax.

Documents dug up by the CTF show staff in Prime Minister Justin Trudeau’s office met twice with a group that received taxpayer funding to produce a report recommending a new home tax. 

The Trudeau government took $250,000 from taxpayers to fund a report that recommends taxing the “housing wealth windfalls gained by many home owners while they sleep and watch TV,” and another $200,000 to understand “the relevance” of the report.

In its 2021 budget, the Trudeau government announced a tax on foreigners who own vacant homes. In the last election, the Liberals said they would send the taxman after you if you sell your home earlier than they think you should. 

The Trudeau government has misled Canadians before. Prior to the 2019 election, the former environment minister told Canadians the Liberals had “no intention” of raising the carbon tax beyond 11 cents per litre of gas. After the election was over, Trudeau announced he would hike the carbon tax to nearly 40 cents per litre by 2030. 

The moral of the story: political talk is cheap. 

Politicians should immediately take action to prove they will not impose a home equity tax by introducing a government or private member’s bill to scrap the requirement to report the sale of our home with the taxman. 

This column was originally published in the Toronto Sun on June 19, 2022.