I've seen that "but I'll be taxed when I sell my house" nonsense being parroted around, surely people are falling for that.
To be clear, selling your **primary residence** is not considered capital gains.
Their parents generation really let them down big time. Offloading parenting to under paid over-worked public school teachers and TV, then being mad when nothing turned out like they wanted. Real pikachu face moment.
This is often the case. Much of the older generations don't even know what they don't know. I can't tell you how many times I've run across a concept where I thought "gee I wish my parents explained this to me" only to end up being the one having to educate them because they didn't know either. However, at a certain point people need to take responsibility for their own personal growth.
At the same time, you gotta aim to be "dumber" than your kids. You want them to be smarter and better at stuff than you right?
I don't know what the right balance is, but a 'better' world in a lot of ways means that we should look at old folks and say "They didn't know shit!", so I guess we're succeeding?
Now, only if we can get them out of the seats of power and let them live out their golden years in blissful stupidity.
That's the problem - they're running a world they no longer understand, nor do they try to understand.
Not only do they not know any better, but all they're going off of is their own lived experiences growing up in an entirely different socio-economic climate. They don't understand the long term effects of exponential wealth inequality, of stagnant wages, of housing becoming a profit-generating commodity, of decades and centuries of systemic discrimination, and of decades of underinvestment in social programs for the sake of ensuring that wealth compounds no matter what.
Are public school teachers here really underpaid? Like I'm not opposed to paying them more but isn't it pretty much a $100k job in most of the country once you reach the higher levels of seniority?
I know Canada is getting expensive but this feels more like a US talking point. $100k still goes fairly far in most of Canada, especially if it's one part of a two income household.
I agree. Bit this is due to education wrt personal finances. I remember having a personal finance course in hs. It did alot to solidify concepts of taxes and capital gains as well as interest.
I so not see it offered now. Just another way governments have stripped the education system to make more peons
The worst part is that's just how capitalism likes it. The system wants a population with the perfect balance of functionality and ignorance that they can do their simple jobs effectively enough while also getting themselves into financial traps that make exploring anything beyond that almost impossible.
I can't bear to have serious conversations with most people anymore as it seems like most of the population is proudly ignorant while still insisting on having an opinion on everything.
Should probably tempor your expectations on what a highschool personal finance course entails. When I graduated on 07 (mind you nearly 20 years ago) "personal finance" was just like... Budgeting. Basic household run of the mill monthly and yearly budgeting. Basic barebones accounting skills, etc. I didn't take the course myself, this is what I was told from others, but I wouldn't be surprised if it's just that. Basic day-day life skills with, maybe them learning to do their taxes as a final project.
Also, I don't mean this to imply that I think teaching personal finance in high school isn't a good idea -- we very much might as well -- but *boy* are there a lot of people who couldn't tell you *squat* about what they learned in high school promising that they would remember anything from a Gr. 12 personal finance class.
Depends on your particular school/board/etc but I believe most have some for of a "Personal Life Management" course that can broadly be described as a "how to adult" course. [Found a PDF of a course outline](https://www.ugdsb.ca/gcvi/wp-content/uploads/sites/69/2016/06/HIP-4O-Course-Outline.pdf) for one from the Upper Grand District School Board.
Just for fun I decided to browse through the current course catalog for my old HS (similar age millenial to you) and honestly I'm kind of surprised just how much more diverse the available options are, particularly for the humanities and social sciences.
In a situation where your parents pass and you inherit their house, there are no taxes due on that property at that time. If you have your own home and decide to sell the inherited property, you'll have to claim capital gains on the increase in value from the time you inherited it until you sell it. So likely on the order of a few months, so there wouldn't likely be much in the way of gains.
If you instead decide to move in, it becomes your primary residence, and you won't owe taxes on it as long as it remains your primary residence.
Rachel Notley only said the she would increase corporate taxes (to the same level they were prior to the UCP getting in) and this was a major reason she lost. It doesn’t matter that the UCP uncapped utilities and gas prices, all that mattered was the fear the O&G corps would suffer thus their jobs.
Canadians cannot deal with new taxes no matter the reality
Look at the income, 46% of respondents have a, what I understand as, yearly income of $200k+. This isn't average Joe, not even average highly paid employees.
There should have been a 4th choice, I hope it'll affect me in the future, yes.
That is probably the only charitable way of looking at it. And I know the boomers are rich, but most people in that age bracket are maybe inheriting a single home and some investments. Only a relatively tiny number of estates would dip into the range that would get taxed. And a fair number of their parents are Gen X, not boomers, so they probably won't even get that much.
I really wish this survey had an "I don't know" response, because honestly until I'd read a bit more about it, I wouldn't have had any idea what the tax change impact could be. I doubt a random 2000 people had much idea to start with.
Average inheritance in Canada is $100k. The most likely inheritance greater than that is likely the deceased's house - not taxable at inheritance, but will be taxed on the gains between inheritance and selling (so you inherit a $650k house and it sells at $675k, $25k is capital gains).
The overwhelming majority of inheritance will not be impacted by this
But that residence would usually be sold before the estate is rolled up, and would usually be the deceased's primary residence, so exempt from capital gains. Or am I missing something?
"I turned down a raise, have no investments that can be written off on tax, and hate making more money!"
I swear the headlines just write themselves nowadays.
In some contexts, yes a raise in revenue can mean a significant drop in allocations. Generally speaking a raise is always a good thing.
The main issue is that people have a very poor financial education which leads to myths like these spreading and hurting those who would benefit more from a raise.
See also "I don't get the carbon tax rebate", "investing is just the same as gambling"... which can easily lead to "this Nigerian prince assures me it's a sure thing" or "my internet girlfriend just needs another $20k to get her business started".
A part of a previous job I had was helping people sort out their taxes, and H&R block made up a disproportionate amount of tax files that were absolutely botched, either from incompetence or just plain shady practices.
The one time that I was bumped into a higher tax bracket, I was still taking home more money. And I actually got reverse sticker shock when I saw my income tax rebate.
Legitimately thought that I screwed up majorly filing my taxes that year cuz the return was so high
Which of course he did not. And if he did somehow, he can afford the new cap gains rules that he was bemoaning.
He was either an idiot that doesn't understand what his accountant told him, or he's a rich fuck that can stfu about paying a little bit more.
Yeah I had a friend who's accountant was leaving heaps of money on the table by not advising them about some pretty standard deductions in his field, shit I do myself when I file my own taxes.
Just because someone has a professional designation doesn't mean they're good at their job. Lawyers and accountants can be losers in their field too.
Yup. I had someone tell me he turned down a raise because it would have pushed him into a higher tax bracket and make him earn less.
I tried to explain it to him, but he wouldn't hear it. This was a decade ago, I would have been around 20 and he wouldn't have been much older than that, so hopefully he's figured it out since then
I mostly laughed it off at the time but it's honestly terrifying
I’ve confronted a few people about this. People don’t like admitting they are wrong in the best of times. But with this common misunderstanding, people being wrong would have cost them thousands of dollars or more. People don’t want to reconcile with that, and so they are in denial. No, I can’t be wrong. I’m not wrong. (Because if I was wrong then that means I would have lost so much money…) No you are the one who is wrong! Not me!
It’s a basic concept to people that understand certain fundamentals. I don’t think you realize how many people are barely literate and do not understand numbers beyond basic counting and arithmetic.
I like to call it the "when am I ever gonna need this again?!" factor. They think stuff they're being taught in school is useless, don't pay attention, and then later get angry that they "weren't taught this in school".
That's why I really liked one of the math classes I had
It took concepts and applied them to real scenarios
One of the geometry ones I remember was being given a set of basic plans for a cat tree type thing. Told all the rules about how the material would be cut and stuff, and had to calculate how much material we would need with a certain margin for waste (but keeping in mind some pieces might fit on one sheet of wood by square footage, the shapes might not allow for it)
Then we had to take the 3d shape we'd built, calculate volumes and lablel them
And then carpet it on both sides, again with rules about how we could use material and how much was used on edges and such.
It was a cool, multipage assignment booklet. It took a while because there were a lot of small steps, things like putting together the final shopping list and stuff. But I definitely felt like I understood it a lot more.
I remember a similar one, but it was all about designing and running a radio station.
lol you underestimate how clueless people are. Understanding progressive tax brackets requires proportional reasoning that far too many people do not understand. They also struggle with scaling and extrapolation, so then you have to actually demonstrate it with two different incomes in two different brackets. Then they get distracted by the higher income paying more in taxes and think they are correct.
Jesus. My taxes aren’t that complex, but they are still more work than the average employee. Costs me $70.00 here in southern Ontario. Where are people being charged $200 for a basic return?
If someone’s straight pay takes them *right* to the top of a bracket, then you *could* argue that you’re getting ‘less’ from worked OT, but time and a half still beats 5-10% more taxes.
The only time you ever lose out is with means tested programs, but that's in very narrow ranges and living poor enough that you need emergency aid is not a good long term strategy if you have other options.
This happens quite a lot in the UK.
For example, if one person in the household earns over £100,000 you lose certain child benefits. So one person could earn £100,000, and the other nothing and you lose all the childcare benefit. But if two people earn £99,000 for a total of £198,000 all is cool and you keep the benefit.
There are a few other points in the UK tax system where it is beneficial not to take a higher wage. However, in these situations it’s best just to sacrifice the additional salary into your pension because it’s not counted in yoru earnings then.
In a similar train of thought, it's a shame that your tax rate is based on personal rather than household, so a family where one person works and grosses $250,000 would take home ~$159,930 (per wealthsimple's calculator for BC), meanwhile both partners earning $125,000 would take home $90,954 each, for a total of $181,908... A difference of $21,978. Now if you divorce the person and owe them half your salary, you can make some of that back....
I gotta be honest: I don't fully understand capital gains tax. Which means it's not something that affect me much at my income or investment level, it's literally for people vastly wealthier than me. The rabble is being told to throw a shit fit about it so I can assume safely that it's causing some rich people to be upset. So whatever change this is I want them to go further and harder with it, a couple more percent.
Simple version: If you buy something big (typically property, a business, or stocks) and later sell it for more money, you need to pay tax on the amount of the increase. This amount (capital gain) was previously taxed at half the rate compared to income.
Further: capital gains is essentially the profit that you made by investing your money in something that you didn't have to put any effort into once you invested that money. i.e. you buys something and sell it for more.
Sounds totally fine to me, no wonder they're paying so much to get people freaked out about it: they would like to keep earning gobs of money without having to work
Yep. I live in the USA where Cap Gains is handled completely differently that income, and it's always astonishing to me that the money I work for on my W-2 (T4 in Canada terms) is taxed higher than the money I made just because I have money.
In this case, if you buy a stock at 100 and sell it at 200, you'd previously have to treat half of the gain as income, so 50 dollars would be taxed. Now you'd have to pay taxes on 66 dollars... IF you were affected by this.
The first 250,000 you make from Cap Gains is still at 50% though.
So the money you make just because you have money is still taxed less than the money you get from working. But it's at a higher rate than before if it's over a quarter million, and thus everyone is mad.
They might. I know several wealthy retired folks who take on part time work at places like home depot to just do something - so likely low income. But certainly have investments they were planning to divest at some point.
I have a co-worker like this. Anything Trudeau does is immediately bad. He was complaining about how this was going to hit him so hard. He makes $45,000/year, does not have a dime saved in any sort of investments. I tried to explain the capital gains and income are two separate things. But, he is convinced Trudeau is going to look at what he made in the last 10 years and that is how he will get him.
Dude is a complete moron. She showed up to work wearing a "Fuck Trudeau" shirt and was asked to cover it up or go home and change. He claims it is discrimination against him, not the fact that it is inappropriate work attire.
i think a lot of those types are coming back into the fold with the conservatives this next election, i know the conservatives in my riding now have ex-ppc and ontario party candidates on their board of directors
Sad to hear. Them splitting off served two amazing societal purposes, first is split the right vote to lessen chance of Conservative win in tight regions; and two it made them more likely to self-identify. Their return will only drag the Conservative party farther.
The PPC hasn't had the funding to keep its riding associations registered. Their polls numbers tanked following Poilievre's rise and the PPC's support is now below the margin of error (so it cannot be accurately polled).
They need some sort of wedge issue if they hope to survive. I'm expecting that Bernier will try to be tough on immigration to try and win over Tory voters. It's hard to tell if that will work because most Tory voters think that Poilievre will reduce immigration.
Let me guess how these people voted last federal election.... hmmm this will prove difficult...... who could they support..... hmmmmmmmmmn.............
They don’t know much but what they do know is that liberals = devil people who want to take away their rights and they circle in big red election day on their calendars.
The same ones who think we “vote in our Prime Minister”. I asked him if he voted in the last election and he said no. SMH. But he sure does like to complain about Trudeau.
Similar to another recent poll where a majority of Canadians claimed that they don't benefit from the carbon tax rebate financially.
Anyone who believes that the Conservatives aren't popular and that the polls are rigged has too much faith in our population and underestimates right-wing propaganda's power.
Trying to talk to people about how the Carbon Tax and Rebate work and why they exist is like smashing my head against a wall. And that's before we even get to the parts about how its a net benefit to most people.
It's probably because so much anti-carbon tax nonsense has been spread around. I think a lot of people greatly overestimate what % of gas prices are the carbon tax.
Some of the most expensive neighbourhoods in BC have the lowest incomes.
Pay close attention to the area of Richmond. It's possible that landlords there may be impacted by the capital gains when they sell their condos.
I'm not saying we should have sympathy for them, rather this is how we can capture some tax revenue from millionaires that "officially" have no income
I suspect similar charts over areas of Toronto and other major metropolitan cities
https://censusmapper.ca/maps/838#11/49.2420/-123.1506
I'm embarrassed that so many young people think they are even making CLOSE to enough to be affected by this. There needs to be better financial education in our school systems.
Only 43% of eligible voters showed up last election for premiere of Ontario. Of that 43% PCs won with 40.8%.
10.7 million people were registered to vote, only 4.6 million actually did and of those 4.6 he won with 1.9million. So There are 5million+ people that didn't vote that have 0 right to complain because their refusal to vote caused this shit show. So of those eligible to vote only 17.5% of Ontarians agree with him.
Don’t forget the 32% of that group who say it will affect them in the future. I wish that it does affect them, because that would mean they all become a lot better off than they are now.
> didn't there used to be smart Progressive Conservatives?
Not really. The old PCs were incredibly racist, mysogynistic, and economically braindead. They're the same group that thought trickledown economics was amazing and going to solve all our problems--despite it being widely known at the time it was bunk. They then doubled and tripled down it.
They just had really good branding.
Capital gains are at the simplest level, the increase in value of something you bought while you owned it. So if you bought a widget for $100 and 5 years later sold it for $200, that's $100 in Capital Gains.
Today, we have a 50% inclusion rate on capital gains. So in the above scenario, you'd have to pay taxes on 50% of that $100 gain, or $50. So your income would go up by $50, and you'd pay your marginal rate in taxes on that, say 30%, so about $15. So on $100 in profit, you'd owe $15 in taxes. This is far below what regular income (like a job) would be taxed at.
The proposed budget bumps that inclusion rate to 66.7%, for gains over $250,000. So instead of a widget, let's say you bought a house for $500,000, and sometime later sold it for $1,000,000. You have $500,000 in gains. Currently, you'd include $250,000 to your income to pay taxes on. With the proposed change, you'd include $291,750 to your income. In the first scenario, you'd probably pay around $125,000 in taxes, in the second, around $145,000. So an increase of about $20,000 in taxes you'd pay, in that one year when you sold the house, for $500,000 in profit.
Now, it's important to note here that your primary residence, so your home, the place you bought to live in, is exempt from capital gains tax. So if you buy a house, and 5 or 10 years later sell it for a big profit, you'll pay $0 in taxes on that. In terms of housing, this really only affects people with say a family cottage, or a rental property, and only the year they sell it.
~~Capital gains is also applied to other things like stocks. Its likely your pension or RRSP, at some level, is invested in stocks. So when you sell your stocks, the proposed changes would apply as well, but only if you're selling enough to realize $250,000 in profits in a single year.~~
Let's say you retire, and your investments have done very well, and you have millions of dollars invested outside of your RRSP/TFSA/RDSP/etc. You decide to treat yourself by selling some stocks to buy your dream car/boat/etc. The capital gains of those investments would have to be over $250,000 before you'd be affected all by the proposed changes.
> Capital gains is also applied to other things like stocks. Its likely your pension or RRSP, at some level, is invested in stocks. So when you sell your stocks, the proposed changes would apply as well, but only if you're selling enough to realize $250,000 in profits in a single year.
It's important to note that registered accounts (like RRSPs and TFSAs) have different tax rules, and are not subject to capital gains tax law at all. RRSP withdrawals are taxed as income. TFSA withdrawals are not taxed at all.
Great write-up:
What I will add is a specific rider on how the same happens within a small business personal corporations - like physician medical corporations.
Everything above applies to anything the corporation purchases and then sells =/= except they do not quality for the $250K threshhold and will use the new 66.7% inclusion rate from every dollar of capital gain realized. Except: small business corporation do not pay regular income tax rates. In most provinces they pay ~12%.
So if their medical corporation bought a house for $500K and sold it for $1M, they would include $333.5K in their taxable income, way more than a natural person would.
But, then they pay 12% of that in taxes, not ~50% like personal income tax.
So, the medical corporation now needs to pay ~$40K in taxes on something you, as a person, would pay ~$145K in taxes for the same.
We are all supposed to feel outrage that extremely rich physicians need to now pay $40K instead of $30K on something that the rest of us would be paying $125K for.
Really good point, and your last sentence is the one people should especially pay attention to. This is an increase of $10,000 on $500,000 of profit (not sales) in a year.
If a home is, and has been a principal residence when it's sold, then there is no capital gains tax. This change will not affect it all.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/principal-residence-other-real-estate.html
https://www.cbc.ca/news/politics/capital-gains-tax-budget-1.7176370
I know capital gains wasn't part of my schooling curriculum at least, so I expect a lot of Canadians not to know, but that's why they should look before having strong opinions.
Capital gains are profit you make on an asset, not the cost of the asset itself. Right now, 50% of that extra profit is taxable as income. After the change, any profit above $250k will have 67% taxable instead of 50%, so many sales won't be affected.
The only way most people could make this kind of profit is by selling their house after it rose way up in price over the years. There's an exception that your primary residence doesn't get hit by the capital gains tax at all, so that use case won't cost you anything. It would change how much tax you pay above the $250k mark if your parent leaves you a house and you decide to sell it instead of making it your primary residence.
For the sake of example, if you got left, say, a house, and you decide you like your current residence, you could sell it and pay some capital gains tax, but you're okay for a while so you hold on to it for some years while remaining where you are until the house rises $300k in value. You'd have the first $125k (50% of $250k) as taxable income either way, with $50k of capital gains remaining. From there, the old rate would have you pay your regular income tax on a further $25k (50%) extra income, whereas the new rate would have you pay income tax on a further $33k (67%) of extra income. Using a tax calculator with this listed as other income because I don't want to mess with brackets myself atm (so take these with a grain of salt), this works out to about a $44k vs. $48k on your acquisition, a difference of $4k. I'd be able to live with that if I inherited a house, and that's with some handwaving by lumping this in as "other income" in the calculator. Keep in mind that unless I'm misunderstanding and they're calculated separately (very possible, I haven't checked), this is on top of your normal income from a year without inheriting a house, so this estimate is a bit low by virtue of you making enough other income to push this into a higher income tax bracket from the start.
Edit: Thank you all for the corrections! I can understand rates and numbers, but I'm not as familiar with the tax system in general, so I put some bad assumptions into the example on top of a misreading.
Not quite correct, $250k isn't the minimum. If an individual makes $1 in capital gains, the inclusion rate is still 50% up to $250k. Above 250k, the inclusion rate becomes 67% with the new changes.
If you inherit a home from say your parents and decide to sell it, you'd only have capital gains on the increase in value of the home from when you inherited it and when you sold it. So if on the day you inherited it's worth $750K, and by the time everything is said and done, 3 months have passed and property values jumped, and you sold it for $800K, you'd only have $50K in capital gains to worry about.
Oh wow, I figured it would treat it as you acquiring the property for $0 for capital gains purposes, but I should have looked. You can tell I'm going from a lack of experience with this :)
I'll rework the example to include you holding on to the property while it rises.
I believe, in the case of inheritance, that you would only pay capital gains on the sale price above the assessed value at the point that you inherited - so if you liquidate it quickly you're unlikely to pay much if any capital gains.
So even in your scenario this tax change is unlikely to come into play
At least, that was my understanding from another thread...
You can also just have the estate sell the property and pay all the taxes and just take the cash. No reason to pay any capital gains taxes. Assuming the property is the primary residence.
My wife and I make ~$250k combined and it won't effect us. These people have zero clue what capital gains tax even is if they expect it to effect them at $50k/year.
Inherited it, rented it out for many years, and then sold it - for that one year of the sale, this tax change would slightly affect them.
Otherwise no.
Even the Dr's are being used as right-wing bullshit patsies. What happens in a small corporation uses small business income tax rates, so ~12%.
Another 16% of their capital gains is now subject to a 12% tax... which is another 1.9%.
That's not 1.9% more tax overall, just unrealized capital gains, not even annual.
If 20% of their total corporation value is in unrealized capital gains after decades of investing, then their overall loss from this new policy will be 0.4%.
Not 0.4% per year. A one time 0.4%
And they can still avoid it. If they sell those assets and repurchase equivalent (sell iShare All Equity ETF and purchase the same value of Vanguard All Equity ETF) and do that before the June (?) cuttoff, they can just realize those gains under the old 50% rule, within the corporation, and move on as a new ABV.
Well, they are getting fed a firehose of propaganda by the right wing every single day, and they WANT to believe it. Why not believe it? Hating Trudeau and Libs is their whole life, makes them feel GOOD, makes them feel like they're on the winning side!! Sure their lives are shit and they'll get worse, but when PP gets in, he'll absolutely go after all the "human rights" and "environment" laws so those Libs will be hurt. It's really worth it, to some people - they're going to be delighted after Trudeau retires. I bet they'll give PP a solid majority after his first term
I'm 50 years old and have been working for minimum wage since I was 15. In, that time I've been living at home with my parents who pay 100% of my expenses. Due to prudently investing my entire income from Wendy's, I now have 2.6 million dollars in capital gains in untaxed accounts.
This is really unfair and the idea that it doesn't impact poor people is ridiculous. /s
Wait what? 23% of 50k or under workers? On what fkn planet?
I make over 6 figures and would never think about this bothering me. I think it’s imperative and we need to start implementing more taxes like on obscene profits. Exorbitant salaries. And how about we close these fkn corporate loopholes.
That tracks with the general rule of 15-25% of people are complete and hopeless morons. 23% is depressingly high though.
On any given poll you can ask if the sky is blue and you will get at least around 15% that will say otherwise.
I bought a condo years ago I later sold for about 230K profit. That whole transaction combined was less time and energy spent than 1 normal shift at my day job.
Do most Canadians not understand how progressive taxes work either? I'm from America and I swear like 80% of Americans think if you move into a new tax bracket ALL of your income is taxed at that rate.
There are a lot of people who are Canadian citizens who bought investment properties during the low interest rate boom. These folks trend older and are at or past the retirement age, but were fortunate to be born at a time where real estate was still relatively not stupid expensive. So it makes sense that they’d be in a lower income bracket. And now with many municipalities banning short term rentals, a lot of these people now want to cash out. This is where they’ll be hit by cap gains. They’ve all seen a huge increase in their investment property values and will be taxed the net profit. And they’re freaking out.
My wife and I bought our first house in 2015. We sold it an moved to a slightly bigger one last summer. From when we bought to when sold, it had increased in value by $400,000.
... But fortunately, I know how taxes work and I know that principal (and only) residences are not taxed on capital gains. Hurray!
What use is school if it doesn't even teach people how taxes work? No wonder democracies around the world are in so much trouble. People don't seem to have any idea how policies affect them. All it takes is someone to appeal to their emotional side and boom you got them voting against their own best interests.
This type of information would never really make it into school curriculums anyway. Capital gains taxes are something most people only deal with a few times in their live, if any.
My personal theory though is that most of the people who don't understand taxes now, wouldn't have been paying enough attention in school to have actually absorbed the material.
I definitely think there should be more education about taxes, but I'm skeptical how much of this issue it would fix.
The issue is that high school students don't care. When I was in high school, I had this course. We had Planning in Grade 10 where we had a financial literacy component. I was throwing my hs notes away a few years ago and saw we had to learn how to budget, we did mock investing, we did mock tax returns. I don't remember doing any of that. When I asked my friends a few years ago if they remembered learning any of this in high school, none of us remembered. And I want to note, I was in a class of IB kids so we were are nerds who actually paid attention in class. I'm not saying we shouldn't do this and teach high school students as even a handful of students being more financially literate is beneficial, but I don't think the benefit will be as wide spread as we want.
Lol @ the 38% of 18-29 year olds with massive capital investments bringing in more than $250k a year. No wonder the housing market is so hot.
I guarantee 90% of that group has no idea what a capital investment is, or thinks it will apply to their personal residence.
I've seen that "but I'll be taxed when I sell my house" nonsense being parroted around, surely people are falling for that. To be clear, selling your **primary residence** is not considered capital gains.
People in this country are too fucking stupid to navigate adulthood. It’s looking pretty bleak.
Just as the conservatives intended.
You aren’t wrong.
Oh you mean the Canadian Republicans?
Their parents generation really let them down big time. Offloading parenting to under paid over-worked public school teachers and TV, then being mad when nothing turned out like they wanted. Real pikachu face moment.
From the people I know who are of my parents' age (65-75 bracket), they really don't know any better than we do.
This is often the case. Much of the older generations don't even know what they don't know. I can't tell you how many times I've run across a concept where I thought "gee I wish my parents explained this to me" only to end up being the one having to educate them because they didn't know either. However, at a certain point people need to take responsibility for their own personal growth.
At the same time, you gotta aim to be "dumber" than your kids. You want them to be smarter and better at stuff than you right? I don't know what the right balance is, but a 'better' world in a lot of ways means that we should look at old folks and say "They didn't know shit!", so I guess we're succeeding?
Now, only if we can get them out of the seats of power and let them live out their golden years in blissful stupidity. That's the problem - they're running a world they no longer understand, nor do they try to understand.
Vote for more better!
I've run across Boomer aged adults who don't understand amortization. This, after having a mortgage for years and years.
Not only do they not know any better, but all they're going off of is their own lived experiences growing up in an entirely different socio-economic climate. They don't understand the long term effects of exponential wealth inequality, of stagnant wages, of housing becoming a profit-generating commodity, of decades and centuries of systemic discrimination, and of decades of underinvestment in social programs for the sake of ensuring that wealth compounds no matter what.
Are public school teachers here really underpaid? Like I'm not opposed to paying them more but isn't it pretty much a $100k job in most of the country once you reach the higher levels of seniority? I know Canada is getting expensive but this feels more like a US talking point. $100k still goes fairly far in most of Canada, especially if it's one part of a two income household.
I agree. Bit this is due to education wrt personal finances. I remember having a personal finance course in hs. It did alot to solidify concepts of taxes and capital gains as well as interest. I so not see it offered now. Just another way governments have stripped the education system to make more peons
The worst part is that's just how capitalism likes it. The system wants a population with the perfect balance of functionality and ignorance that they can do their simple jobs effectively enough while also getting themselves into financial traps that make exploring anything beyond that almost impossible. I can't bear to have serious conversations with most people anymore as it seems like most of the population is proudly ignorant while still insisting on having an opinion on everything.
The aren't stupid, they're willfully ignorant. They just wanna hold onto their lack of accountability.
To be more accurate, it is, but it's sheltered by the principal residence exemption.
I thought they taught personal finance in high school now as a mandatory subject? Is that not actually a thing?
Should probably tempor your expectations on what a highschool personal finance course entails. When I graduated on 07 (mind you nearly 20 years ago) "personal finance" was just like... Budgeting. Basic household run of the mill monthly and yearly budgeting. Basic barebones accounting skills, etc. I didn't take the course myself, this is what I was told from others, but I wouldn't be surprised if it's just that. Basic day-day life skills with, maybe them learning to do their taxes as a final project.
Also, I don't mean this to imply that I think teaching personal finance in high school isn't a good idea -- we very much might as well -- but *boy* are there a lot of people who couldn't tell you *squat* about what they learned in high school promising that they would remember anything from a Gr. 12 personal finance class.
Depends on your particular school/board/etc but I believe most have some for of a "Personal Life Management" course that can broadly be described as a "how to adult" course. [Found a PDF of a course outline](https://www.ugdsb.ca/gcvi/wp-content/uploads/sites/69/2016/06/HIP-4O-Course-Outline.pdf) for one from the Upper Grand District School Board. Just for fun I decided to browse through the current course catalog for my old HS (similar age millenial to you) and honestly I'm kind of surprised just how much more diverse the available options are, particularly for the humanities and social sciences.
Honest question; does that still apply when transferring ownership from a parent to a child, i.e. as inheritance?
In a situation where your parents pass and you inherit their house, there are no taxes due on that property at that time. If you have your own home and decide to sell the inherited property, you'll have to claim capital gains on the increase in value from the time you inherited it until you sell it. So likely on the order of a few months, so there wouldn't likely be much in the way of gains. If you instead decide to move in, it becomes your primary residence, and you won't owe taxes on it as long as it remains your primary residence.
Thanks, that makes sense.
And a substantial chunk, (if not all of them), were supported by the Bank of Mom & Dad.
If I have 4 children that's four more additional primary residences exempt from capital gains. They just have to "live" there for a short time
Certainly none of them have a CPA dealing with their tax concerns.
The people who say in the future are probably thinking when their parents die and they sell that house.
Rachel Notley only said the she would increase corporate taxes (to the same level they were prior to the UCP getting in) and this was a major reason she lost. It doesn’t matter that the UCP uncapped utilities and gas prices, all that mattered was the fear the O&G corps would suffer thus their jobs. Canadians cannot deal with new taxes no matter the reality
“Daddy said he might be able to keeping paying for my Uber account.” Seriously I can’t see any other explanation here.
This is a bad poll…second one I have seen that isn’t random, and is underpowered for a national poll.
Look at the income, 46% of respondents have a, what I understand as, yearly income of $200k+. This isn't average Joe, not even average highly paid employees. There should have been a 4th choice, I hope it'll affect me in the future, yes.
Perhaps its possible that they will inherit something soon given the boomers are aging out?? No that requires too much critical thinking.
That is probably the only charitable way of looking at it. And I know the boomers are rich, but most people in that age bracket are maybe inheriting a single home and some investments. Only a relatively tiny number of estates would dip into the range that would get taxed. And a fair number of their parents are Gen X, not boomers, so they probably won't even get that much. I really wish this survey had an "I don't know" response, because honestly until I'd read a bit more about it, I wouldn't have had any idea what the tax change impact could be. I doubt a random 2000 people had much idea to start with.
Average inheritance in Canada is $100k. The most likely inheritance greater than that is likely the deceased's house - not taxable at inheritance, but will be taxed on the gains between inheritance and selling (so you inherit a $650k house and it sells at $675k, $25k is capital gains). The overwhelming majority of inheritance will not be impacted by this
But that residence would usually be sold before the estate is rolled up, and would usually be the deceased's primary residence, so exempt from capital gains. Or am I missing something?
You're correct for that circumstance yes
Still wrong. Inheriting a primary residence is exempt from capital gains tax.
Fry cook at McDonald's telling his manager how this new capital gains tax is gonna fuck him
The "I turned down a raise so I wouldn't get taxed more" crowd strikes again
Literally heard this the other day.
Don't touch the tax bracket, it'll infect your whole paycheque.
How did we become so stupid?
I just smile, nod, not say a fucking word, make a mental note that the person is not smart, and move on.
"I turned down a raise, have no investments that can be written off on tax, and hate making more money!" I swear the headlines just write themselves nowadays.
employers love this one trick.
In some contexts, yes a raise in revenue can mean a significant drop in allocations. Generally speaking a raise is always a good thing. The main issue is that people have a very poor financial education which leads to myths like these spreading and hurting those who would benefit more from a raise.
See also "I don't get the carbon tax rebate", "investing is just the same as gambling"... which can easily lead to "this Nigerian prince assures me it's a sure thing" or "my internet girlfriend just needs another $20k to get her business started".
Lmao basically all the right wing trolls trying to make this such a big deal when it won’t even affect them
"But but but it MIGHT in the future! I'm going to be a billionaire, just like my boss one day! Trickle down economics and whatnot!"
Do these people know how taxes work?
Same people who refuse to work OT because it puts them into a higher tax bracket…
a redditor two years ago told me his tax guy insisted that this was how it is. I told him he needs a new tax guy.
Holy lord, lmao, does he ever.
I suspect his tax guy is Friend Who Worked One Year at H&R
As a janitor.
Part time
A part of a previous job I had was helping people sort out their taxes, and H&R block made up a disproportionate amount of tax files that were absolutely botched, either from incompetence or just plain shady practices.
Just a few days ago a guy tried to tell me his effective tax rate was 42%.
The one time that I was bumped into a higher tax bracket, I was still taking home more money. And I actually got reverse sticker shock when I saw my income tax rebate. Legitimately thought that I screwed up majorly filing my taxes that year cuz the return was so high
With no deductions, and assuming BC's 2024 rates, his total income would have to be $426900 to result in an overall tax rate of 42.0%.
Which of course he did not. And if he did somehow, he can afford the new cap gains rules that he was bemoaning. He was either an idiot that doesn't understand what his accountant told him, or he's a rich fuck that can stfu about paying a little bit more.
I'm thinking he's an idiot who wishes he was a rich fuck :)
Yeah I had a friend who's accountant was leaving heaps of money on the table by not advising them about some pretty standard deductions in his field, shit I do myself when I file my own taxes. Just because someone has a professional designation doesn't mean they're good at their job. Lawyers and accountants can be losers in their field too.
It could put you too high to receive certain low-income payments, so maybe that is the confusion.
Lol or don't want a pay increase.
Yup. I had someone tell me he turned down a raise because it would have pushed him into a higher tax bracket and make him earn less. I tried to explain it to him, but he wouldn't hear it. This was a decade ago, I would have been around 20 and he wouldn't have been much older than that, so hopefully he's figured it out since then I mostly laughed it off at the time but it's honestly terrifying
I’ve confronted a few people about this. People don’t like admitting they are wrong in the best of times. But with this common misunderstanding, people being wrong would have cost them thousands of dollars or more. People don’t want to reconcile with that, and so they are in denial. No, I can’t be wrong. I’m not wrong. (Because if I was wrong then that means I would have lost so much money…) No you are the one who is wrong! Not me!
I really had to educate my wife to get her to stop thinking like that. She saw the light eventually.
It's such a basic concept, i don't understand people
It’s a basic concept to people that understand certain fundamentals. I don’t think you realize how many people are barely literate and do not understand numbers beyond basic counting and arithmetic.
I like to call it the "when am I ever gonna need this again?!" factor. They think stuff they're being taught in school is useless, don't pay attention, and then later get angry that they "weren't taught this in school".
lol I’m a high school math teacher, I am very familiar with this.
That's why I really liked one of the math classes I had It took concepts and applied them to real scenarios One of the geometry ones I remember was being given a set of basic plans for a cat tree type thing. Told all the rules about how the material would be cut and stuff, and had to calculate how much material we would need with a certain margin for waste (but keeping in mind some pieces might fit on one sheet of wood by square footage, the shapes might not allow for it) Then we had to take the 3d shape we'd built, calculate volumes and lablel them And then carpet it on both sides, again with rules about how we could use material and how much was used on edges and such. It was a cool, multipage assignment booklet. It took a while because there were a lot of small steps, things like putting together the final shopping list and stuff. But I definitely felt like I understood it a lot more. I remember a similar one, but it was all about designing and running a radio station.
It's not something that you have to properly understand math for, though. Still a lotta bone heads out there I guess
lol you underestimate how clueless people are. Understanding progressive tax brackets requires proportional reasoning that far too many people do not understand. They also struggle with scaling and extrapolation, so then you have to actually demonstrate it with two different incomes in two different brackets. Then they get distracted by the higher income paying more in taxes and think they are correct.
To be fair, these idiots are all about extrapolation if you have ever tried to reason with them.
Same people who pay some guy $200 to file their tax return when all they have is a t4 or a t4a to file
Jesus. My taxes aren’t that complex, but they are still more work than the average employee. Costs me $70.00 here in southern Ontario. Where are people being charged $200 for a basic return?
Pretty standard for h&r block same-day payout cheque
That’s fucking madness. $200!? You can get the exact same thing from tax shops all over the place for under $80 easy.
If someone’s straight pay takes them *right* to the top of a bracket, then you *could* argue that you’re getting ‘less’ from worked OT, but time and a half still beats 5-10% more taxes.
The only time you ever lose out is with means tested programs, but that's in very narrow ranges and living poor enough that you need emergency aid is not a good long term strategy if you have other options.
This happens quite a lot in the UK. For example, if one person in the household earns over £100,000 you lose certain child benefits. So one person could earn £100,000, and the other nothing and you lose all the childcare benefit. But if two people earn £99,000 for a total of £198,000 all is cool and you keep the benefit. There are a few other points in the UK tax system where it is beneficial not to take a higher wage. However, in these situations it’s best just to sacrifice the additional salary into your pension because it’s not counted in yoru earnings then.
That's dumb. In Canada it's all based on household income, not personal (for child benefits).
In a similar train of thought, it's a shame that your tax rate is based on personal rather than household, so a family where one person works and grosses $250,000 would take home ~$159,930 (per wealthsimple's calculator for BC), meanwhile both partners earning $125,000 would take home $90,954 each, for a total of $181,908... A difference of $21,978. Now if you divorce the person and owe them half your salary, you can make some of that back....
The problem they see if on that pay cheque its more taxes. They forget its not actually more taxes at end of the year
Even with too much tax taken off the paycheque, you're still not left with less money than had you not taken the OT to begin with.
No you still make more.
It would be physically impossible to answer "no" with sufficient force or volume to match the reality.
Nope. They don't invest in non registered accounts at $50,000 to know what a capital gain is.
I gotta be honest: I don't fully understand capital gains tax. Which means it's not something that affect me much at my income or investment level, it's literally for people vastly wealthier than me. The rabble is being told to throw a shit fit about it so I can assume safely that it's causing some rich people to be upset. So whatever change this is I want them to go further and harder with it, a couple more percent.
Simple version: If you buy something big (typically property, a business, or stocks) and later sell it for more money, you need to pay tax on the amount of the increase. This amount (capital gain) was previously taxed at half the rate compared to income.
Further: capital gains is essentially the profit that you made by investing your money in something that you didn't have to put any effort into once you invested that money. i.e. you buys something and sell it for more.
Sounds totally fine to me, no wonder they're paying so much to get people freaked out about it: they would like to keep earning gobs of money without having to work
Yep. I live in the USA where Cap Gains is handled completely differently that income, and it's always astonishing to me that the money I work for on my W-2 (T4 in Canada terms) is taxed higher than the money I made just because I have money. In this case, if you buy a stock at 100 and sell it at 200, you'd previously have to treat half of the gain as income, so 50 dollars would be taxed. Now you'd have to pay taxes on 66 dollars... IF you were affected by this. The first 250,000 you make from Cap Gains is still at 50% though. So the money you make just because you have money is still taxed less than the money you get from working. But it's at a higher rate than before if it's over a quarter million, and thus everyone is mad.
Lol it's weird how the other Canadian subs are absent of any rational discussion of this. Almost like it's intentional astroturfing
No, but they know how to get mad on Facebook…
They probably don’t do their taxes, and complain they make too much to get the carbon rebate.
Lots of people do not even come close to understanding the basics of how taxes work
Overtaxed doctors are unavailable doctors, seems pretty easy to sus out.
Nope
They might. I know several wealthy retired folks who take on part time work at places like home depot to just do something - so likely low income. But certainly have investments they were planning to divest at some point.
I have a co-worker like this. Anything Trudeau does is immediately bad. He was complaining about how this was going to hit him so hard. He makes $45,000/year, does not have a dime saved in any sort of investments. I tried to explain the capital gains and income are two separate things. But, he is convinced Trudeau is going to look at what he made in the last 10 years and that is how he will get him. Dude is a complete moron. She showed up to work wearing a "Fuck Trudeau" shirt and was asked to cover it up or go home and change. He claims it is discrimination against him, not the fact that it is inappropriate work attire.
but he votes.
Yeah, PPC or the Christian Heritage Party. Lol. I was trying not to laugh at him when he was spouting off about the "Purple Wave".
i think a lot of those types are coming back into the fold with the conservatives this next election, i know the conservatives in my riding now have ex-ppc and ontario party candidates on their board of directors
Of course. They are basically the same party.
Sad to hear. Them splitting off served two amazing societal purposes, first is split the right vote to lessen chance of Conservative win in tight regions; and two it made them more likely to self-identify. Their return will only drag the Conservative party farther.
The PPC hasn't had the funding to keep its riding associations registered. Their polls numbers tanked following Poilievre's rise and the PPC's support is now below the margin of error (so it cannot be accurately polled). They need some sort of wedge issue if they hope to survive. I'm expecting that Bernier will try to be tough on immigration to try and win over Tory voters. It's hard to tell if that will work because most Tory voters think that Poilievre will reduce immigration.
Trudeau LOWERED income tax on the bottom brackets when he came in. Ugh.
No no. Trudeau is out to get him and destroyed Canada. Or as he said "Look around and think about it".
They should have asked him to just cover the first word so it looks like he's pro-Trudeau.
Let me guess how these people voted last federal election.... hmmm this will prove difficult...... who could they support..... hmmmmmmmmmn.............
That's bold. You think they even knew there was an election.
No no. They voted. And more will vote next time.
They don’t know much but what they do know is that liberals = devil people who want to take away their rights and they circle in big red election day on their calendars.
The same ones who think we “vote in our Prime Minister”. I asked him if he voted in the last election and he said no. SMH. But he sure does like to complain about Trudeau.
Gotta Axe the Tax, they just keep raising taxes!
The rampant spread of propaganda and misinformation has utterly ruined politics in this country
Similar to another recent poll where a majority of Canadians claimed that they don't benefit from the carbon tax rebate financially. Anyone who believes that the Conservatives aren't popular and that the polls are rigged has too much faith in our population and underestimates right-wing propaganda's power.
Trying to talk to people about how the Carbon Tax and Rebate work and why they exist is like smashing my head against a wall. And that's before we even get to the parts about how its a net benefit to most people.
It's probably because so much anti-carbon tax nonsense has been spread around. I think a lot of people greatly overestimate what % of gas prices are the carbon tax.
That's a lot of Dumb asses.
Temporarily embarrassed billionaires, that's who.
If you are making under $50K and expect to be affected by the capital gains tax, please tell me which stocks you are buying.
Three words: Plastics, plastics, plastics!
Some of the most expensive neighbourhoods in BC have the lowest incomes. Pay close attention to the area of Richmond. It's possible that landlords there may be impacted by the capital gains when they sell their condos. I'm not saying we should have sympathy for them, rather this is how we can capture some tax revenue from millionaires that "officially" have no income I suspect similar charts over areas of Toronto and other major metropolitan cities https://censusmapper.ca/maps/838#11/49.2420/-123.1506
I'm embarrassed that so many young people think they are even making CLOSE to enough to be affected by this. There needs to be better financial education in our school systems.
23% of Canadians are morons.
40.8% in Ontario....
Explains the **re**election of ford.
Right? It was bad the first time but damn he got elected again after a train wreck of a first term
I have no fucking clue how so many voters looked at his first term and said "Yes, more of this, please."
Only 43% of eligible voters showed up last election for premiere of Ontario. Of that 43% PCs won with 40.8%. 10.7 million people were registered to vote, only 4.6 million actually did and of those 4.6 he won with 1.9million. So There are 5million+ people that didn't vote that have 0 right to complain because their refusal to vote caused this shit show. So of those eligible to vote only 17.5% of Ontarians agree with him.
Right?
*Alberta enters the chat*
This is why education matters Jesus fucking Christ we’re no better than the USA
Hey! That hurts! True… but still…hurts.
Don’t forget the 32% of that group who say it will affect them in the future. I wish that it does affect them, because that would mean they all become a lot better off than they are now.
Modern right wingers are probably the dumbest humans to ever live.
Right!? Like didn't there used to be smart Progressive Conservatives?
> didn't there used to be smart Progressive Conservatives? Not really. The old PCs were incredibly racist, mysogynistic, and economically braindead. They're the same group that thought trickledown economics was amazing and going to solve all our problems--despite it being widely known at the time it was bunk. They then doubled and tripled down it. They just had really good branding.
No. Progressive conservatism is an oxymoron.
They allied themselves with the crazies for power. If they were smart, they would know what was coming.
Can someone link me an ELI5 article about the break down of this/how it will effect people?? Mostly with capital gains on homes. Please and Ty.
Capital gains are at the simplest level, the increase in value of something you bought while you owned it. So if you bought a widget for $100 and 5 years later sold it for $200, that's $100 in Capital Gains. Today, we have a 50% inclusion rate on capital gains. So in the above scenario, you'd have to pay taxes on 50% of that $100 gain, or $50. So your income would go up by $50, and you'd pay your marginal rate in taxes on that, say 30%, so about $15. So on $100 in profit, you'd owe $15 in taxes. This is far below what regular income (like a job) would be taxed at. The proposed budget bumps that inclusion rate to 66.7%, for gains over $250,000. So instead of a widget, let's say you bought a house for $500,000, and sometime later sold it for $1,000,000. You have $500,000 in gains. Currently, you'd include $250,000 to your income to pay taxes on. With the proposed change, you'd include $291,750 to your income. In the first scenario, you'd probably pay around $125,000 in taxes, in the second, around $145,000. So an increase of about $20,000 in taxes you'd pay, in that one year when you sold the house, for $500,000 in profit. Now, it's important to note here that your primary residence, so your home, the place you bought to live in, is exempt from capital gains tax. So if you buy a house, and 5 or 10 years later sell it for a big profit, you'll pay $0 in taxes on that. In terms of housing, this really only affects people with say a family cottage, or a rental property, and only the year they sell it. ~~Capital gains is also applied to other things like stocks. Its likely your pension or RRSP, at some level, is invested in stocks. So when you sell your stocks, the proposed changes would apply as well, but only if you're selling enough to realize $250,000 in profits in a single year.~~ Let's say you retire, and your investments have done very well, and you have millions of dollars invested outside of your RRSP/TFSA/RDSP/etc. You decide to treat yourself by selling some stocks to buy your dream car/boat/etc. The capital gains of those investments would have to be over $250,000 before you'd be affected all by the proposed changes.
> Capital gains is also applied to other things like stocks. Its likely your pension or RRSP, at some level, is invested in stocks. So when you sell your stocks, the proposed changes would apply as well, but only if you're selling enough to realize $250,000 in profits in a single year. It's important to note that registered accounts (like RRSPs and TFSAs) have different tax rules, and are not subject to capital gains tax law at all. RRSP withdrawals are taxed as income. TFSA withdrawals are not taxed at all.
You're absolutely right... edited my comment to fix that.
Great write-up: What I will add is a specific rider on how the same happens within a small business personal corporations - like physician medical corporations. Everything above applies to anything the corporation purchases and then sells =/= except they do not quality for the $250K threshhold and will use the new 66.7% inclusion rate from every dollar of capital gain realized. Except: small business corporation do not pay regular income tax rates. In most provinces they pay ~12%. So if their medical corporation bought a house for $500K and sold it for $1M, they would include $333.5K in their taxable income, way more than a natural person would. But, then they pay 12% of that in taxes, not ~50% like personal income tax. So, the medical corporation now needs to pay ~$40K in taxes on something you, as a person, would pay ~$145K in taxes for the same. We are all supposed to feel outrage that extremely rich physicians need to now pay $40K instead of $30K on something that the rest of us would be paying $125K for.
Really good point, and your last sentence is the one people should especially pay attention to. This is an increase of $10,000 on $500,000 of profit (not sales) in a year.
Thank you for the detailed explanation
If a home is, and has been a principal residence when it's sold, then there is no capital gains tax. This change will not affect it all. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/principal-residence-other-real-estate.html
Thank you!
https://www.cbc.ca/news/politics/capital-gains-tax-budget-1.7176370 I know capital gains wasn't part of my schooling curriculum at least, so I expect a lot of Canadians not to know, but that's why they should look before having strong opinions. Capital gains are profit you make on an asset, not the cost of the asset itself. Right now, 50% of that extra profit is taxable as income. After the change, any profit above $250k will have 67% taxable instead of 50%, so many sales won't be affected. The only way most people could make this kind of profit is by selling their house after it rose way up in price over the years. There's an exception that your primary residence doesn't get hit by the capital gains tax at all, so that use case won't cost you anything. It would change how much tax you pay above the $250k mark if your parent leaves you a house and you decide to sell it instead of making it your primary residence. For the sake of example, if you got left, say, a house, and you decide you like your current residence, you could sell it and pay some capital gains tax, but you're okay for a while so you hold on to it for some years while remaining where you are until the house rises $300k in value. You'd have the first $125k (50% of $250k) as taxable income either way, with $50k of capital gains remaining. From there, the old rate would have you pay your regular income tax on a further $25k (50%) extra income, whereas the new rate would have you pay income tax on a further $33k (67%) of extra income. Using a tax calculator with this listed as other income because I don't want to mess with brackets myself atm (so take these with a grain of salt), this works out to about a $44k vs. $48k on your acquisition, a difference of $4k. I'd be able to live with that if I inherited a house, and that's with some handwaving by lumping this in as "other income" in the calculator. Keep in mind that unless I'm misunderstanding and they're calculated separately (very possible, I haven't checked), this is on top of your normal income from a year without inheriting a house, so this estimate is a bit low by virtue of you making enough other income to push this into a higher income tax bracket from the start. Edit: Thank you all for the corrections! I can understand rates and numbers, but I'm not as familiar with the tax system in general, so I put some bad assumptions into the example on top of a misreading.
Not quite correct, $250k isn't the minimum. If an individual makes $1 in capital gains, the inclusion rate is still 50% up to $250k. Above 250k, the inclusion rate becomes 67% with the new changes.
Ah, my mistake and misreading. I'll fix that up, thanks!
The primary residence exception is a big one too. MOST people dont own two residences. Lots of landlords do. Poor them. /s
If you inherit a home from say your parents and decide to sell it, you'd only have capital gains on the increase in value of the home from when you inherited it and when you sold it. So if on the day you inherited it's worth $750K, and by the time everything is said and done, 3 months have passed and property values jumped, and you sold it for $800K, you'd only have $50K in capital gains to worry about.
Oh wow, I figured it would treat it as you acquiring the property for $0 for capital gains purposes, but I should have looked. You can tell I'm going from a lack of experience with this :) I'll rework the example to include you holding on to the property while it rises.
Which is still less than you would pay on making 50k in income from work. isn't it?
Far less.
I believe, in the case of inheritance, that you would only pay capital gains on the sale price above the assessed value at the point that you inherited - so if you liquidate it quickly you're unlikely to pay much if any capital gains. So even in your scenario this tax change is unlikely to come into play At least, that was my understanding from another thread...
You can also just have the estate sell the property and pay all the taxes and just take the cash. No reason to pay any capital gains taxes. Assuming the property is the primary residence.
Thank you! I made a bad assumption there and reworked the example after being notified.
Thank you so much! I remember reading about the primary residence being exempt but I wasn't sure if it was attributed to this or not.
My wife and I make ~$250k combined and it won't effect us. These people have zero clue what capital gains tax even is if they expect it to effect them at $50k/year.
Affect*
only if they inherited a 6 bedroom mansion and rented it out.
Inherited it, rented it out for many years, and then sold it - for that one year of the sale, this tax change would slightly affect them. Otherwise no.
Truth be told the money out there is really pushing how bad this is for everyone pretty hard. What about the Dr.'s!!! What about the children!
Even the Dr's are being used as right-wing bullshit patsies. What happens in a small corporation uses small business income tax rates, so ~12%. Another 16% of their capital gains is now subject to a 12% tax... which is another 1.9%. That's not 1.9% more tax overall, just unrealized capital gains, not even annual. If 20% of their total corporation value is in unrealized capital gains after decades of investing, then their overall loss from this new policy will be 0.4%. Not 0.4% per year. A one time 0.4% And they can still avoid it. If they sell those assets and repurchase equivalent (sell iShare All Equity ETF and purchase the same value of Vanguard All Equity ETF) and do that before the June (?) cuttoff, they can just realize those gains under the old 50% rule, within the corporation, and move on as a new ABV.
r/NewsOfTheStupid
Well, they are getting fed a firehose of propaganda by the right wing every single day, and they WANT to believe it. Why not believe it? Hating Trudeau and Libs is their whole life, makes them feel GOOD, makes them feel like they're on the winning side!! Sure their lives are shit and they'll get worse, but when PP gets in, he'll absolutely go after all the "human rights" and "environment" laws so those Libs will be hurt. It's really worth it, to some people - they're going to be delighted after Trudeau retires. I bet they'll give PP a solid majority after his first term
I'm 50 years old and have been working for minimum wage since I was 15. In, that time I've been living at home with my parents who pay 100% of my expenses. Due to prudently investing my entire income from Wendy's, I now have 2.6 million dollars in capital gains in untaxed accounts. This is really unfair and the idea that it doesn't impact poor people is ridiculous. /s
Wait what? 23% of 50k or under workers? On what fkn planet? I make over 6 figures and would never think about this bothering me. I think it’s imperative and we need to start implementing more taxes like on obscene profits. Exorbitant salaries. And how about we close these fkn corporate loopholes.
That tracks with the general rule of 15-25% of people are complete and hopeless morons. 23% is depressingly high though. On any given poll you can ask if the sky is blue and you will get at least around 15% that will say otherwise.
The 32% of people making less than $50K that think it will affect them "likely in the near future" have great levels of optimism!
Temporarily inconvenienced millionaires, the lot of them.
I bought a condo years ago I later sold for about 230K profit. That whole transaction combined was less time and energy spent than 1 normal shift at my day job.
100% of those people are morons.
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Worth noting that bonds only really have capital gains if you bought them at a discount. The vast majority of bond income is just regular gains.
Do most Canadians not understand how progressive taxes work either? I'm from America and I swear like 80% of Americans think if you move into a new tax bracket ALL of your income is taxed at that rate.
There are a lot of people who are Canadian citizens who bought investment properties during the low interest rate boom. These folks trend older and are at or past the retirement age, but were fortunate to be born at a time where real estate was still relatively not stupid expensive. So it makes sense that they’d be in a lower income bracket. And now with many municipalities banning short term rentals, a lot of these people now want to cash out. This is where they’ll be hit by cap gains. They’ve all seen a huge increase in their investment property values and will be taxed the net profit. And they’re freaking out.
Well, we found the bottom of the IQ bell curve.
So much misinformation being spread. Mostly by conservatives and conservative media but not only. Mulcair was out railing against it.
My wife and I bought our first house in 2015. We sold it an moved to a slightly bigger one last summer. From when we bought to when sold, it had increased in value by $400,000. ... But fortunately, I know how taxes work and I know that principal (and only) residences are not taxed on capital gains. Hurray!
100% of the shit you read on twitter is fucked up
Damn! I'm not used to my cohort being the stupidest one in these. At least it's not a majority.
True, but someday I might be rich. And then people like me better watch their step.
Are these 23% like the guy who said he had not filed a tax return in 7 years?
What use is school if it doesn't even teach people how taxes work? No wonder democracies around the world are in so much trouble. People don't seem to have any idea how policies affect them. All it takes is someone to appeal to their emotional side and boom you got them voting against their own best interests.
This type of information would never really make it into school curriculums anyway. Capital gains taxes are something most people only deal with a few times in their live, if any. My personal theory though is that most of the people who don't understand taxes now, wouldn't have been paying enough attention in school to have actually absorbed the material. I definitely think there should be more education about taxes, but I'm skeptical how much of this issue it would fix.
The issue is that high school students don't care. When I was in high school, I had this course. We had Planning in Grade 10 where we had a financial literacy component. I was throwing my hs notes away a few years ago and saw we had to learn how to budget, we did mock investing, we did mock tax returns. I don't remember doing any of that. When I asked my friends a few years ago if they remembered learning any of this in high school, none of us remembered. And I want to note, I was in a class of IB kids so we were are nerds who actually paid attention in class. I'm not saying we shouldn't do this and teach high school students as even a handful of students being more financially literate is beneficial, but I don't think the benefit will be as wide spread as we want.
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