It’s also not clear to me how a personal exemption limit solves the stated issue of investors gobbling 30% maker share. Investors aren’t covered in the personal exemption anyways. Would it reduce house flippers? Sure, but they only occupy one residence at a time anyways, so they aren’t reducing supply.
Capital gains, not total sale price of residence.
a lifetime cap of $1-million on the personal residence capital gain exemption.
This fucks anyone who moves or is recolacted for work. When I was in the army I was relocated every 2 years, so I’d burn through that cap in 8 years @250k, 4 years @500k, or a single posting to Ottawa. Police and border are in the same boat.
I’ve got a banker friend, they get relocated branches every 4 years.
I’ve got a doctor friend, she took a residency doing rural medicine in nowhere BC; but she plans to move back with her family in the Victoria area eventually, her family probably wouldn’t or couldn’t do that with a residence cap. That lifetime cap could change the calculus for doctors doing stints in areas that really need them. Particularly since these stints are normally early in the career while the cashflows are still tight from medical debts.
They note that the lifetime cap wouldn’t hit most Canadians in lower-cost communities
It could hit them worse then higher-income. There isn’t a lot of space to play with an extra tax payment, on top of all the other costs, to relocate for work opportunities.
It would also hit the retired community pretty hard, they are unlike to gain new sources of income, so that would be a big smack if they were looking to downsize or more to assisted living. That could cause an increase in predatory reverse mortgages.
This is a personal blind spot, but I’d guess there’s also impacts on estate planning?