Canadian Government urged to extend tax rollover to small investors

Canada ’s housing market has always been a major indicator of the overall health and productivity of our economy. Now, organized real estate is taking a stand that could ultimately give a boost to the national economy while it benefits small investors who own secondary homes as investment properties. The Canadian Real Estate Association (CREA) is calling on the federal government to make changes to the Capital Gains Tax that would provide several economic benefits, including a boost in Canada’s productivity, expansion of rental housing, and encouragement of urban regeneration. CREA is one of Canada’s largest single-industry trade associations representing more than 88,000 REALTOR ® members across Canada, including us, your local Toronto Real Estate professionals.

As of March 16, 2007, CREA has met with MPs and other government officials to outline its tax proposal. Under the proposal, secondary homeowners would be allowed to defer capital gains tax when an investment property is sold and the proceeds of the sale are invested in another investment property within one year.

CREA’s proposal seeks to remedy the current situation, where small investors are holding onto their investment properties because of the tax consequences associated with selling and reinvesting. This practice of holding off on selling is “unduly influencing typical market activity,” says CREA. Members of CREA’s Canadian Commercial Council believe a tax deferral would trigger economic activity, since small investors typically undertake renovations and make related purchases when they reinvest. In many Canadian communities, small investors are at the heart of community development and redevelopment initiatives.

If you’d like to know more about buying a secondary property for investment purposes or selling your existing investment property, then just call the ThinkTorontoHomes.com Team and we'll be happy to provide you with more info.