In the midst of the housing crisis, the federal government unilaterally announced the increase in the capital gains tax as part of its budget and, a few days later, the government of Quebec followed suit.
This measure caused a strong reaction from Quebec owners and, in the space of a few days, a petition calling for the exemption of plexes received more than 22,000 signatures.
This strong reaction can be explained by the seriousness of this attack on the middle class, without consideration of the specificities intrinsic to the Quebec housing model. The federal government claims to want to make the ultra-rich pay, when in fact, its new taxation will bully small owners and weaken close relationships between owners and tenants.
Being an owner does not mean being ultra-rich
CORPIQ agrees with the principles of wealth sharing, but the measure must still attack those who are truly part of the 1% of the richest.
If just once in your life you make a trade that makes $250,000 in profit, are you really a millionaire?
When governments change the rules of the game 20, 30, 40 years after your investment in a duplex and cut into your retirement fund, are you really one of the ultra-rich?
A model of the relationship to housing specific to Quebec
Unlike the Canadian provinces, more Quebecers are renters and live in small plexes. About 40% of our population lives in rental housing, unlike 30% in other provinces. This statistic rises to 60% for the island of Montreal. In addition to the fact that there are a greater number of tenants in Quebec, there is also a higher number of owners. Here, the majority of plexes (buildings with 2 to 9 housing units) are owned by Quebec investors, often alone or grouped together in an association. Elsewhere in Canada, while the model of ownership by large corporations is more widespread, the rental stock is mainly made up of large apartment towers.
By adding an additional tax to the already very heavy burden of small Quebec owners, governments will further suffocate them, thereby favoring purchases by large corporations with deeper pockets.
The application of this increase in the inclusion rate from 50% to 66% of the capital gain would be a severe blow to the profitability of holding rental properties in the long term. As owners often only have the proceeds from long-term sales to justify their continued commitment to the rental market, this increase will constrain access to property for small owners. It is therefore a whole relationship with the housing of small plexes and local owners which risks collapsing.
Find solutions together
Quebec owners are demanding the removal of plexes from this new tax increase and CORPIQ is raising their voice with government authorities. CORPIQ requests to meet with the Deputy Prime Minister of Canada and Minister of Finance, Chrystia Freeland, as well as her provincial counterpart, the Minister of Finance Eric Girard, in order to evaluate this exclusion or alternative solutions that are more respectful of class average and the Quebec model. For example, it would be possible to draw inspiration from certain countries which take into account the duration of ownership of the asset in the method of taxing capital gains.
Real estate owners want the energies of all stakeholders in the sector to be invested in finding solutions to resolve the housing crisis rather than exacerbating it with measures penalizing small, middle-class rental owners.
What do you think ? Participate in the dialogue
reference: www.lapresse.ca