The false flag

Time for some truthiness.

Blog dog Ted, of Cowtown, informs that local Mad Max cult members are using social media to stir the loins of homeowners, claiming Libs are about to drop the hammer on home equity. Yup, capital gains taxes coming when you sell your home.

This claim builds on misleading tweets by the otherwise rational Pierre Pollievre, the Con finance critic. At the heart of the confusion is a new Liberal commitment to slap people who buy and then sell a principal residence in a short period of time. This, critics allege, reveals the real evil lurking within progressive hearts, which is to pay for Covid by eventually looting the principal residence capital gains tax exemption.

So, huh? Anything to this?

Ted says the PPC crew is going nuts, and furnishes this evidence:

If this were true and widely known, of course, there’d be no Liberal MPs after September 20th. Folding all of the profit on a home sale into an owner’s annual income would indeed cause tax mayhem. So far nobody has suggested it. Even a renegade Ontario Liberal caucus recommendation a couple of years ago did not go this far, suggesting instead a 50% tax on any gains within a year of ownership, dropping to 25% after two years and phased out after five years.

What’s the source of this campaign invective?

It’s the anti-flip tax. Says the governing party’s platform: “We will crack down on speculation and house flipping with an anti-flipping tax on residential properties, requiring properties to be held for at least 12 months.”

This is way too vague. A slippery slope. What will the tax be? Maybe the 50% of profits party MPs voted for? And who will be subject to this penalty? People move not just because they’re dirtbag speculators but for jobs, family commitments, financial reversal, illness or when the neighbors an a-hole and smokes weed on the veranda all day. And, by the way, what’s wrong with a ‘flipper’ who buys a beater house and adds value to it by installing a new kitchen, roof, furnace or bathrooms? That person will already have profits taxed as income, so is this anti-flip charge atop that?

Too many questions. And this uncertainty is allowing the issue to morph out of control.

For example, the Canadian Taxpayers Federation took the bait.

“This so-called anti-flipping tax would be a new federal tax on the sale of your primary residence. Your home. The one you live in,” fumes CTFer Kris Sims.

“Right now, it has a caveat requiring owners to live in their house for a year before they can sell it tax-free. But that caveat could change with the stroke of a pen. Make no mistake about this crack in the foundation: Prime Minister Justin Trudeau is proposing a new tax on the sales of our homes. This is a step towards the big home equity tax that many are worried about.”

The anti-tax dudes do have one valid point, which has been highlighted on a certain pathetic blog for the past few years. Everybody selling a home in Canada, whether it’s been a PR for decades or not, is required by law to declare the transaction, the purchase and sale prices and the dates involved on their annual return. The Libs created this disclosure, saying at the time it was a tool to prevent non-residents from claiming the PR exemption. But it’s not. This is a massive data-gathering mechanism with many applications. Creating a tax dependent upon the length of home ownership could certainly one of them.

The media is getting aroused, as well. Here is the hyperbolic conclusion of a columnist for Post Media, where old newspapers go to die:

The Liberals need to come clean about this idea they denied was ever something they would consider. They need to be clear about the taxation level and whether it would apply to more than just those who sell after less than a year in a home. We know the federal government has spent $250,000 studying the idea of implementing a home tax that could bring in an estimated $7 billion a year. Can voters really believe that if elected the Trudeau Liberals wouldn’t bring in a broad-based tax on all home sales?

In war truth is the first casualty. In elections, too. It’s discouraging to see emotional issues like abortion, assault weapons or public health care dragged out in every single campaign when crumbling national finances will impact everyone, and everything. Now political lowlifes are telling wrinklies they’re headed for a 53% tax bracket, will lose their pensions and see their real estate nestegg squished.

That’s not happening. It’s a lie. For now.

About the picture: “Here is my son and  girlfriend’s baby named Finn,” writes Todd. “He’s a 1 yr old, half GreatDane and half Newfoundlander! My first grandson. He loves the breeze . Feel free to use the picture . photo credit Brit.”