Latest news with #UnderusedHousingTax
Cision Canada
27-04-2025
- Business
- Cision Canada
Five of the GTA's Largest Homebuilders Endorse the Conservative Party of Canada Housing Plan to Tackle Canada's Housing Crisis
PICKERING, ON, April 27, 2025 /CNW/ - In a show of unity and shared vision for the future of housing in Canada, five of the Greater Toronto Area (GTA)'s leading homebuilders — ARISTA, DECO, Fieldgate, Opus and Paradise — are endorsing the Conservative Party of Canada's housing plan, calling it the most effective blueprint to deliver Canadians affordable homes. "As homebuilders, we see the impact of burdensome regulations, rising costs, and housing shortages are having on Canadian families who are locked out of the housing market," said Michael De Gasperis, President and CEO of ARISTA Homes, speaking on behalf of the five homebuilders. "We believe Pierre Poilievre is the only national leader proposing real, practical solutions that align with what the housing industry needs: reducing red tape, faster approvals, and investment in the trades that build our communities," De Gasperis stated. Together, these five homebuilders have built nearly 100,000 homes across the GTA and are backing the Conservative housing platform, which includes: Axeing the GST on all new homes under $1.3 million will save up to $65,000 on the cost of a new home and $3,000 per year in mortgage payments; Incentivizing cities to reduce development charges, with every dollar of relief a municipality offers in development charges reimbursed by 50 per cent, up to a maximum of $50,000; Scrapping the Underused Housing Tax that costs more to administer than is collected in taxes; and Eliminating the Liberals' new tax on home renovations to support homeowners. "A Conservative government will help kickstart the homebuilding industry that is experiencing its worst downturn in 35 years. By eliminating GST (on new homes under $1.3M), reducing red tape, and incentivizing municipalities to expedite approvals, we will once again have the economic environment to flourish and deliver homes that Canadians can afford," stated Steven Weisz, Co-Owner of Paradise Developments. In addition to the endorsement, the homebuilders will be supporting a rally with Mr. Poilievre at their joint Seatonville Sales Centre in Pickering today. The rally will bring together industry professionals, tradespeople, residents and other community members to hear firsthand from Mr. Poilievre about his vision for tackling Canada's housing crisis, cutting red tape, and ensuring more homes are built, faster and more affordably.
Yahoo
08-04-2025
- Business
- Yahoo
History shows Liberals' new housing plan failed the last time it was implemented
I love studying history. In my undergraduate studies, I made sure to load up on post-Confederation Canadian history courses and it's truly fascinating to learn how this country was built. Similarly, I am always interested if proposed taxation policies were ever considered historically. More often than not, the answer is yes. There have also always been pockets of time in our history when there were great needs for more housing units, most often because of significant population growth. Governments have often let the market respond to such needs, as they should, but Canada also has an interventionist history that has been questionable at times. For example, the Liberal government played the bogeyman approach to housing challenges instead of looking in the mirror to realize that its immigration policies were a significant contributor. To make things worse, the bogeymen were largely attacked through the taxation system. Need a reminder? Here's a quick list. The Underused Housing Tax applies a one per cent tax and an annual filing requirement on non-Canadian citizens, who are apparently sucking up a significant portion of the housing at the expense of average Canadians. The tax and filing requirement have been a debacle since they were first introduced in 2022. Then's there's the prohibition of non-citizens from purchasing Canadian residential property (since, again, non-citizens are supposedly causing our housing problems). This is not a taxation measure, but it has caused a chill and created complexity when planning for non-resident investment. First introduced in 2023 for a two-year period, it was extended for another two-year period that expires Jan. 1, 2027. Property 'flippers' are also apparently a problem. Accordingly, a property flipping tax was introduced in 2023 that causes residential property disposition gains to be treated as fully taxable if disposed of within 12 months from acquisition, unless certain 'life exceptions' are met. This is an absurd and duplicative tax since the current Income Tax Act already has tools to deal with flippers. In 2024, the prohibition of deductions for short-term rental owners who operate in a jurisdiction where such rentals are prohibited was introduced, as if short-term rental owners, especially in my neighbourhood, are one of the causes of housing shortages. Yeah, right. This dangerous provision is an affront to good Canadian tax policy. In case the above strokes of genius weren't enough, the Liberals are now reaching back to a flawed 1970s' playbook. Last week, they announced that they would 'get back into the business of housing' by building 500,000 homes per year. You don't need a grade 12 diploma or, in Mark Carney's case, a PhD in economics to realize that such a target is simple bluster. Anyone who believes this is an achievable target should spend five minutes with our country's great entrepreneurial homebuilders, since most will give you an earful on how unrealistic such a plan is. Buried in that announcement was a statement that the Liberals would like to resurrect a 1970s' tax-shelter program to try to encourage rental property construction: the multiple unit residential building (MURB) program. Investors in certified MURB projects were allowed to claim accelerated capital cost allowance — essentially, depreciation — on the building and use those deductions to create or increase a rental loss for tax purposes. Those paper losses could be deducted against the investor's other income, thereby sheltering that income from tax. This favourable tax treatment was intended to attract private capital into rental housing by improving after-tax returns. The MURB program did cause rental construction, but it came with some significant behavioural consequences. The Liberals' recent announcement boasted that the MURB program helped produce almost 200,000 units from 1974 to 1981. However, a Canada Mortgage and Housing Corp. report in March 1981 said, 'Estimates prepared in the course of this study indicate that at the end of 1980 there was a total of 170,000 MURB dwelling units either completed or under construction in Canada.' But the report made it clear that those estimates should not be interpreted as implying that the MURB provision stimulated additional rental starts. That's a distinction with a difference. The report also said MURB projects were more expensive because investors valued the tax benefits and that it was not an efficient mechanism for promoting rental investment. It called the program a stopgap measure that didn't solve the fundamental issues of high development costs and low rental yields. The main beneficiaries of the MURB program were found to be developers, promoters and investors with high marginal tax rates. Many investors were buying MURB investments simply for the tax shelter, with little to no consideration of the investment issues. 'It appears likely that, if left to its own devices, the rental market would have begun to respond to the excess demand on its own — albeit at higher rents,' the report said. Yep, letting the market deal with supply and demand is almost always the most appropriate answer. Given the above, the famous Allan MacEachen budget on Nov. 12, 1981, terminated the MURB program for any new projects. In 1987, the complete repeal of the MURB program was announced and phased out over a three-year period. Capital gains tax break for investing in Canada is a big idea 10 tax-related policies to watch for during the election Tariffs are a tax and the impact will be broader than higher prices In other words, the MURB program's economic and social benefits did not exceed nor justify its costs. Revisionist history has been quite popular in recent years. In the present case, having the Liberals think that resuscitating the MURB tax shelter is a good idea conveniently ignores historical facts and experiences. The study of history isn't just a hobby; it's a guide. If Carney truly understood history — or basic economics — he'd understand that real solutions come from unleashing market forces, not failed government tax vanity projects dressed up as housing plans. Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at kgcm@ and his LinkedIn profile is _____________________________________________________________ If you like this story, sign up for the FP Investor Newsletter. _____________________________________________________________
Yahoo
18-03-2025
- Business
- Yahoo
Five ways to make sure we don't have another debacle during tax filing season
Another tax season, another tax filing debacle: the Canada Revenue Agency on March 11 announced its systems were not yet ready for personal tax filings that include capital gains. 'The CRA recommends that those impacted by this situation wait until the updates are completed in the coming weeks before filing their income tax and benefit return,' it said. 'The CRA will grant relief in respect of late-filing penalties and interest until June 2, 2025, for individual filers and until May 1, 2025, for trust filers to provide additional time for taxpayers reporting capital gains to meet their tax filing obligations.' In other words, affected Canadians won't be able to file their returns until the beginning of April. Accountants will be even more backed up. This is the third year in a row that some issue has affected tax preparation. For the 2022 filings, it was the massive confusion involving the new Underused Housing Tax. Last year, it was the bare trust debacle. Now, it's the capital gains confusion and delay. For this year, you have to feel for the CRA. Like most Canadians, the CRA was at the mercy of the government that was managing the capital gains proposals. First announced in the April 16, 2024, federal budget, the management of the proposals became a textbook example of how to not introduce taxation policy. The final spike in the proposals came on Jan. 31, 2025 — three months before the general April 30 filing deadline for individuals to file their personal tax returns — when the government announced it was 'deferring' the proposals to Jan. 1, 2026. Combine the deferral with newly crowned Prime Minister Mark Carney saying his government will not support the proposals and Conservative Party Leader Pierre Poilievre stating he does not support the capital gains proposals, and these proposals are dead. This means the CRA, which was administering the proposals as if they were law pursuant to their longstanding administrative policy, had to change back to its 'old' system for capital gains. I'm not a computer programmer, but I can only imagine it's not easy to do that. You can logically question why the CRA was administering the proposals as if they were law when a bill was not even before Parliament. This decision needs to be reviewed for future similar situations and we also need a significant rethink of how taxation policy is developed and implemented. However, the recent tax debacles are just one piece of a much larger puzzle. Canada's economy has been extraordinarily mismanaged for years, and our tax policies and systems have done nothing to address such mismanagement. As economist Jack Mintz recently said, we can't afford another lost decade. Our country risks economic stagnation if we don't address our structural issues. He highlighted that our economy has been stagnant, with virtually no growth in real per capita gross domestic product (GDP) for the past 10 years. Our productivity, as measured by GDP per working hour, is 11th-lowest among 36 Organization for Economic Co-operation and Development (OECD) countries, just three-quarters of Ireland's and 80 per cent of Poland's. Regarding taxation, here are five ways to help fix the mess we are in. 1. Future governments need to stop announcing significant tax changes through news releases. Introducing significant tax policy changes should go through proper legislative and stakeholder review, with clear timelines and structured implementation. 2. Recognize that good tax policy matters. It's not all about politics. Instead, good tax policy drives investment decisions and attracts successful and talented people, which our country desperately needs. High tax rates and continuing attacks on successful people drive those people and investment capital out of Canada. We need to stem the tide of those departures and reverse it quickly. 3. Genuine efforts need to be made to simplify the Income Tax Act and its related administration. It has become way too complex for the average Canadian to navigate. Ideally, it would be great if the average Canadian would understand their tax affairs without requiring a team of experts. Of course, that would require Canadians to increase their financial literacy, something that is desperately needed to help make informed choices, especially at the ballot box. 4. Ensure the CRA is prepared before changes take effect. The past three years of horrible tax filing seasons should never happen again. 5. Overall, we need significant tax reform to deal with the above challenges. It's long overdue. None of the above fixes are rocket science. It's just good governance, something that has been sorely lacking in Canada. The next federal election will be an important referendum on Canada's economic future. The choice is clear: keep heading down the path of reckless tax policy and economic mismanagement or elect leadership that actually understands how tax policy impacts the economy. On Oct. 21, 2019, Canada's Election Day that year, I was in the audience at the Vancouver tour stop of the classic rock band The Who — one of my favourite bands. I loved the concert, but despised the election result. Five and a half years later, I'm hoping Canadians Won't Get Fooled Again. As the song says, 'Meet the new boss, same as the old boss.' Tariffs are a tax and the impact is broader than higher prices Avoid these common mistakes at tax time Liberals have made our tax system complex, inefficient and heavy If we don't demand real tax reform, we won't just get fooled again; we'll get fleeced again. To those who find comfort in shouting 'Elbows up,' I understand the assertive Canadian patriotism. But empty slogans — what we call 'all hat, no cattle' in my home in Calgary — won't fix our broken tax system or our mismanaged economy. Instead, we need real leadership, meaningful tax reform, and a clear path out of this lost decade. It's time for action, not just words. Vote wisely. Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at kgcm@ and his LinkedIn profile is _____________________________________________________________ If you like this story, sign up for the FP Investor Newsletter. _____________________________________________________________ Sign in to access your portfolio
