No firm action on capital gains
OTTAWA, March 19 /CNW Telbec/ - The federal government has failed to
provide an opportunity for Canadians to increase their investments in real
This opportunity would have come in a proposal from The Canadian Real
Estate Association (CREA) to allow the deferral of capital gains tax and
recaptured capital cost allowance when an investment property is sold, and the
proceeds of the sale are invested in another investment property within one
The Association, on behalf of more than 88,000 REALTORS(R) in Canada, has
been calling on the federal government to make such changes to the capital
gains tax for several years now. CREA's proposal would provide several
economic benefits, including a boost in Canada's productivity, expansion of
rental housing, and encouragement of urban regeneration.
"Small investors are holding onto their real property investments because
of the tax consequences associated with selling and reinvesting, and this is
unduly influencing typical market activity," noted CREA Chief Executive
Officer Pierre Beauchamp. "Despite our disappointment, CREA remains committed
to working with the federal government to develop a policy that will encourage
investment in real property."
Canadian REALTORS(R) were also disappointed to learn that the federal
government did not revise the current Home Buyers' Plan to include a market
adjustment for the maximum RRSP withdrawal limit - a move that would have been
beneficial to first-time homebuyers.
"The maximum loan limit under the Home Buyers' Plan has been losing
ground as a percentage of rising average resale home prices for more than a
decade," noted Beauchamp. "Plan users are being forced to finance bigger
mortgages, causing their debt burden to rise even as interest rates remain
The $20,000 maximum loan limit for a home downpayment has not been
adjusted since the plan was established in 1992, which has had a negative
impact on its effectiveness.
The lack of inflation adjustment is an obvious oversight in the design of
the plan. Canadians REALTORS(R) have been calling on the federal government to
raise the maximum loan limit to $25,000 to account for inflationary gains over
the past 15 years. REALTORS(R) would also like to see the loan limits adjusted
every five years to account for inflation.
"Though we are disappointed that these much needed changes are not
reflected in the 2007 Federal Budget, we hope that the federal government will
make improvements to the plan - and the affordability of Canadian housing - a
priority in the immediate future," added Beauchamp.
About The Canadian Real Estate Association
The Canadian Real Estate Association is one of Canada's largest
single-industry trade Associations, and represents more than 88,000
REALTORS(R) across Canada. CREA's primary mission is to represent its members
at the federal level of government and to act as a watchdog on national
legislation affecting or impacting the real estate industry. CREA also works
to defend the public's right to own and enjoy property.
For further information:
For further information: please contact: Bob Linney, Communications
Director, The Canadian Real Estate Association, Cell.: (613) 795-4346