Tuesday, October 31, 2006
Commercial REALTORS call for property investment tax changes
FOR IMMEDIATE RELEASE
October 31, 2006
NANAIMO - The Chair of the Commercial Division of the Vancouver Island Real Estate Board (VIREB) is joining the call on the federal government to amend tax laws for real property investors.
"Commercial property investors currently face significant financial penalties when selling or expanding," explains Jay Cousins.
"REALTORS are calling for amendments to the Income Tax Act to promote the rollover of capital gains taxes and capital cost allowance, when an investor sells a property and reinvests in another property."
Cousins says a deferral of the capital gains tax and the capital cost allowance recovery would allow an investor the freedom to change asset classes, locations and /or sizes without penalty.
"Currently, investors are charged capital gains tax as soon as they sell a property. This really is a deterrent to the sale of many investor properties," he says, "because investors can choose to retain the asset instead of paying the tax."
This position was part of the submission to the House of Commons Standing Committee on Finance delivered by the Canadian Real Estate Association (CREA). VIREB will be lobbying the three area MPs directly before the end of November.
"Holding onto commercial and residential investment properties simply to avoid taxes is also disincentive to maintaining the overall quality of these holdings," Cousins says.
"What we're saying, is allowing property investors to sell their holdings and transfer the equity into other properties, while deferring the payable taxes, is an incentive to grow the economy.
"When a property owner reinvests the proceeds, no real economic gain has been realized that provides funds to pay the tax and they are simply retaining the invested money but in a different form."
The suggested timeline for reinvestment should have a provision for sales occurring late in the current tax year, to carry over into the next tax year.
CREA noted in its submission that the intent of the recommendation is to enhance national productivity by directly addressing the key factors weighing down the investment climate in Canada - high taxes, labour force mobility and the fact that the population must now be more financially self-reliant in retirement.
VIREB represents approximately 1,090 licensed REALTOR members in more than 80 member offices on Vancouver Island (north of Victoria).
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REALTOR is a trademark identifying real estate professionals who are members of the Canadian Real Estate Association (CREA). REALTORS subscribe to a Code of Ethics and Standards of Business Practices as set out by CREA. MLS is a cooperative marketing system used by Canada's real estate boards.
For more information, please contact:
Jay Cousins, Chair, Commercial Division, 250-751-1223
Drew Harris, Communications, 250-390-4212
October 31, 2006
NANAIMO - The Chair of the Commercial Division of the Vancouver Island Real Estate Board (VIREB) is joining the call on the federal government to amend tax laws for real property investors.
"Commercial property investors currently face significant financial penalties when selling or expanding," explains Jay Cousins.
"REALTORS are calling for amendments to the Income Tax Act to promote the rollover of capital gains taxes and capital cost allowance, when an investor sells a property and reinvests in another property."
Cousins says a deferral of the capital gains tax and the capital cost allowance recovery would allow an investor the freedom to change asset classes, locations and /or sizes without penalty.
"Currently, investors are charged capital gains tax as soon as they sell a property. This really is a deterrent to the sale of many investor properties," he says, "because investors can choose to retain the asset instead of paying the tax."
This position was part of the submission to the House of Commons Standing Committee on Finance delivered by the Canadian Real Estate Association (CREA). VIREB will be lobbying the three area MPs directly before the end of November.
"Holding onto commercial and residential investment properties simply to avoid taxes is also disincentive to maintaining the overall quality of these holdings," Cousins says.
"What we're saying, is allowing property investors to sell their holdings and transfer the equity into other properties, while deferring the payable taxes, is an incentive to grow the economy.
"When a property owner reinvests the proceeds, no real economic gain has been realized that provides funds to pay the tax and they are simply retaining the invested money but in a different form."
The suggested timeline for reinvestment should have a provision for sales occurring late in the current tax year, to carry over into the next tax year.
CREA noted in its submission that the intent of the recommendation is to enhance national productivity by directly addressing the key factors weighing down the investment climate in Canada - high taxes, labour force mobility and the fact that the population must now be more financially self-reliant in retirement.
VIREB represents approximately 1,090 licensed REALTOR members in more than 80 member offices on Vancouver Island (north of Victoria).
- 30 -
REALTOR is a trademark identifying real estate professionals who are members of the Canadian Real Estate Association (CREA). REALTORS subscribe to a Code of Ethics and Standards of Business Practices as set out by CREA. MLS is a cooperative marketing system used by Canada's real estate boards.
For more information, please contact:
Jay Cousins, Chair, Commercial Division, 250-751-1223
Drew Harris, Communications, 250-390-4212
