Tax Talk: Navigating the New Capital Gains Impacts

How could the new tax laws impact your real estate investments?

Join Kim and Polly as they sit down with real estate guru Jeff Fitzpatrick, who breaks down the latest in capital gains tax changes, federal and provincial flipping taxes, and their potential impact on Vancouver's real estate market.

Listen For:
01:24 - Capital Gains Tax Overview
03:33 - Impact of Interest Rates
08:31 - Corporate vs. Personal Property
19:19 - BC Flip Tax Details

GUEST: JEFF FITZPATRICK
Website | LinkedIn  

CONNECT WITH KIM:
LinkedIn | Instagram | Website | Facebook | YouTube | X

CONNECT WITH POLLY:
LinkedIn | Instagram | Website | Facebook |

Follow so you never miss a NEW episode! Leave us an honest rating and review on Apple or Spotify.

Transcript

Jeff Fitzpatrick (00:00):

I'm hearing rumors in the industry that we're starting to see more and more of that, and I'm hearing that some people might be interested in trying to sell and capture a sale in advance of these changes being implemented. But I think really where the rubber hits the road is on the commercial side because the numbers are much bigger and mostly all of those assets are corporately held.

Kim Taylor (00:32):

Hi everyone. Welcome back to our show. We have an exciting guest here today. Hello Polly. Do you want to introduce him?

Polly Reitze (00:42):

Yes, I will. How are you? You Kim?

Kim Taylor (00:44):

Good. I'm very well, yes, it's It's a great sunny day. Good.

Polly Reitze (00:48):

I know. It's great. Today you guys, we are talking with Jeff Fitzpatrick, who is a colleague of mine and also a partner at West Vancouver, Engel & Völkers. He's been in the business for over 19 years. I personally enjoy his company in my office. He is a book of knowledge and what is he going to direct us through today and help describe the new policies implemented by the BC government and some federal policies as well. So we want to welcome Jeff Fitzpatrick. Hi

Kim Taylor (01:24):

 Hi Jeff.

Jeff Fitzpatrick (01:25):

Hey guys. Hi.

Kim Taylor (01:26):

Welcome.

Polly Reitze (01:27):

Yeah, welcome. Thanks for having

Jeff Fitzpatrick (01:29):

Thanks for having me. Appreciate the time.

Kim Taylor (01:29):

Appreciate time. Good. So we've asked Jeff to speak on some of these plan changes that have come down from the federal and the provincial government to address the capital gains tax and touch on the new BC flipping tax, actually the federal flipping tax and the VC flipping tax. There's two,

Polly Reitze (01:50):

There's a big mouthful there. It's all yours, Jeff.

Kim Taylor (01:53):

Yeah.

Polly Reitze (01:54):

Help us understand this.

Kim Taylor (01:57):

Before we get into that, maybe Jeff, could you describe the current state of our real estate market in Vancouver?

Jeff Fitzpatrick (02:06):

Yeah, absolutely. Yeah, so thank for having me first of all.

Polly Reitze (02:10):

Pleasure. I think.

Jeff Fitzpatrick (02:11):

Thank you. Think the interesting thing about the market right now is it seems to be improving, but it's very market specific. The introduction of all of these rate increases the Bank of Canada being on tear in terms of raising rates and they've gone on pauses right now. And so I think by and large, most people are waiting to see if interest rates are going to come down. The inflation number came out a couple of days ago, and I think there's some encouraging news in terms of the Bank of Canada possibly lowering the rate. In June, the federal government came out with a new budget, which is part and parcel to what we're going to be talking about today in terms of the capital gains tax changes, but they also have a lot of spending. And so I think the concern that the Bank of Canada is faced with right now is with such 29 billion worth of a deficit, they're planning on spending.

(02:53):

Everybody's going to have jobs and have money to stand on higher priced milk and gasoline and that sort of thing. So the idea that the inflation numbers are going to continue to come down might be a little optimistic. But that said, the inflation number that came up for April seems to now be within the band of the Bank of Canada's expectation just under 2.8%. And so that gives us some optimism that we might see the interest rates come down. I think it's a lot of people that are getting excited about that, both in terms of preparing to sell their home because they expect that they're going to find something exciting that they can buy. And I think that's mainly been the challenge that we've had in the past. It became a self-fulfilling prophecy. If you couldn't find something that you wanted to purchase, then it's a bad time to sell my home.

(03:33):

And that meant that we had lower levels of inventory. And so the stats have been pretty consistent Over the past 12 months. We've been trending at about 30 to 32% less sales than we traditionally expect over the 10 year period, 10 year average. That changed actually last month. We're now 12% below the 10 year average in terms of number of sales, but we hit 12,000 number of listings just the first time that we've seen that since 2022. So the dynamics are changing a little bit. Before we were working within an environment where we had lower inventory levels and that was providing some support for pricing and we also had lower sales. So you'd think that what the interest rates increasing so dramatically you'd see pricing come down, but we haven't really seen it. Pricing has been relatively stable and the main reason for that is is that we've got lots or farming, we've got very limited amount of inventory, and so the properties that are selling are generally not realizing a really, really big dip in pricing.

(04:27):

But now that we're getting into a period where we're seeing more properties listed, it's possible that the gasoline that gets thrown into the market is going to be an interest rate drop in June. So I think everybody's anticipating, okay, wait a second. What's going to happen in the summer? The most robust sales cycle typically is the spring and the fall. We generally don't, we see a trough in terms of sales in the summertime that we may buck the trend this year because if you see an interest rate drop in June, we may see more people come out, okay, I'm going to list my place to sale now. It's a good time. Or maybe I'm going to find I'm get excited, maybe I can get a lower interest rate, whatever. So that could drive the market forward into the fall. So kind of hard to forecast right now. They're probably the best way to say it is spotty. Some stuff is selling and you're like, whoa, why did that one sell and this one didn't?

Polly Reitze (05:13):

Because the buyers can. Yes, there's a few instances that they just can.

Jeff Fitzpatrick (05:19):

Exactly.

Polly Reitze (05:20):

Great. Well, good information.

Kim Taylor (05:22):

Yes, thank you for that. Can you outline the plan changes to the capital gains tax?

Jeff Fitzpatrick (05:30):

So the federal government made in my mind two fundamental changes and these changes are going to set to be introduced. The implementation date is June 25th. And so I think the main changes can be captured in the change to the inclusion rate and we'll discuss that in a minute. And then the change to the inclusion rate being different on the personal side as opposed to the corporate side. Right now, the inclusion rate captures everything in any capital gain. So just to touch on what a capital gain is, if you sell something that's a capital that's either an asset or a capital property, the profit is considered the capital gain. And so let's pretend you buy a house for a million bucks and then you sell it for 2 million. In that case, let's dispense with the whole expenses and all that stuff and leave that off to the side.

(06:24):

But in this example, you've got a million dollars worth of a profit under the current legislation right now, whether you own the asset corporately or personally, the inclusion rate's the same, it's 50%. What the inclusion rate does is it captures what is the taxable gain. And so what you do is you take the profit, in our example, we bought a property for a million dollars so many years later, you sell it for $2 million, you've got a $1 million capital gain. So the taxable gain, you multiply that by the inclusion rate. Currently it's 50%. So that means in this case you'd take 500,000, which is a 50% inclusion rate on a million. And then you would add that onto your tax filing as additional income as a capital gain taxable income. Now if you, that's going to be subject to your own personal marginal tax rate. So if you're in a very high tax bracket, then that additional $500,000 is going to be a little bit more, it is going to have a heavier tax bill just depending on how much money you need. Now I will forewarn everybody, I am not an accountant, so I would recommend

Kim Taylor (07:26):

None of us are.

Jeff Fitzpatrick (07:28):

I would recommend that everybody's got a unique tax picture. Definitely kind of validate some thoughts that we share today or some assumptions or whatever against your own personal tax situation, whatever, and speak to your tax professional. We'll try to touch on some basic broad topics and then you can kind get into the details with your accountant. So currently the inclusion rate is 50%, and the goal is to try to identify what the taxable gain is going to be. The two changes that they're making now, which are set to be implemented on June 25th is number one, if you own the property in a company name, so corporately held, the inclusion rate starts from the first dollar and that inclusion rate is going to be 66.67%. You see this in media reporting at 67%, but I think it's actually 66.67%. And so that means that if the whole show is now at about a 16% higher inclusion rate, that doesn't necessarily mean that you're at a higher tax bracket.

(08:31):

They haven't raised the taxes, they've raised the inclusion rate. So to use our previous example, right now, if you sell a property for a million or front me, you buy property for a million and you sell it for 2 million, you've got a million dollars worth of the capital gain. Currently, your taxable gain is going to be 500,000 if it's, and that gets added to your income. Correct. If it's corporately held after June 24th, so June 25th onwards, that whole scenario changes dramatically. Rather than it being a $500,000 taxable gain, it's now going to need a $666,000 capital gain. So you've got $166,000 extra in terms of a capital gain that's going to be subject to your tax rate

Polly Reitze (09:18):

On the million dollar profit.

Jeff Fitzpatrick (09:19):

Correct. So that's the first change is that the corporate structure is deviating a little bit from the personal side. If you do it on the personal side, and this is where the headline came in in terms of it being characterized as a rich tax, because what they're suggesting is, is that it's mainly going to be people that are earning quite a bit that are going to be subject to this tax. Because if you own an asset on your personal side, bear in mind that we're not talking about principal residences because principal residences are still exempt as a capital gain. You have an exemption against capital gains taxes. But if yourself,

Kim Taylor (09:49):

Even if you have a suite, even if you have a suite, it's just,

Jeff Fitzpatrick (09:52):

So that depends. Now we're going to get into the week here where the disclaimer comes up in terms of sneaking to your accountant. But I think that depends on whether you're depreciating the asset and whether you're doing a cowboy cost allowance and all that stuff. I think that there's a manner in which you can structure your personal residence whereby if you, you're writing off certain things inside your house in terms of the suite that you've got, you might be subject to a partial capital gain, but you may not be. So I mean that's dependent on how you're filing your taxes. And I would certainly speak to your account. I think there is a manner in which you can structure it such that the whole house, regardless of whether you have a suite or not, can be fully exempt if the capital gains exemption. But that's going to be dependent on how you've treated your taxes in the past, I believe. And again,

Kim Taylor (10:31):

Or if you've written off a portion of your home for business, same kind of thing.

Jeff Fitzpatrick (10:36):

Exactly. But I think even sometimes you can do that. I think it might come down to depreciation in capital cost allowance, but again, then that's deeper water than I used to switch in.

Kim Taylor (10:45):

Talk to your accountant.

Jeff Fitzpatrick (10:46):

Yes. But the main distinction now in terms of your personal held assets that you sell on the subject to capital gains is that the first 250,000 is going to be subject to the old inclusion rate. So if you sell a property, you've only got a hundred or $200,000 worth of a capital gain, then that's still going to be subject to the 50% inclusion rate. The new 66.67% inclusion rate is going to be on the amount above two 50. So that's

Polly Reitze (11:18):

Additional 16%. Correct. 16.7%. Yeah,

Jeff Fitzpatrick (11:22):

Exactly. So that's the main difference is on the personal side you've got a $250,000 allocation and the 50% inclusion rate, and then anything beyond that gets the additional 16% or 16, 17%. And then on the corporate side, the whole show is from dollar one. Is it the new inclusion rate? Does that make sense? Yeah,

Polly Reitze (11:46):

It's a lot. That's a lot. And it's a month away. That's

Jeff Fitzpatrick (11:51):

Significant. I think the one big question is how this has impacted the market. I personally have a deal right now where the buyer had purchas, the seller had purchased a property about 19 years ago. And so the capital gain is fairly significant. And so we did the deal in a long time ago, a couple months ago, and now we're waiting for it to close. And they have approached the buyer, my client, in the spirit of exploring whether we can move the date up to the 24th. They didn't explain why they wanted to move it to the 24th, but pretty clear June 24th is a pretty specific date.

Polly Reitze (12:25):

The kids are out of school. Yes.

Jeff Fitzpatrick (12:27):

And so we had to kind of do some juggling to try to help out or whatever. And the seller is offering some compensation in order to try to make it work. Cause it's kind of the symbiotic relationship. My people can get into the place early, they can get in under the new kind of capital gains or the old capital gains regime and then everybody kind of wins. And so I'm hearing rumors in the industry that we're starting to see more and more of that. And I'm hearing that some people might be interested in trying to sell and capture a sale in advance of these changes being implemented. But I think really where the rubber hits the road is on the commercial side because the numbers are much bigger and mostly all of those assets are corporately held. So this change is definitely more significant in terms of a corporately held asset.

(13:12):

I personally have an investment property that is corporately held. I have a holding company, and so I'm thinking about doing what's called a beneficial interest transfer. And so that means that you actually don't transfer the property on title. You just do some paperwork behind the scenes and file with the CRA. And because I have it corporately held and because the inclusion rate is going to be more severe after the 25th of June, what I'm considering is doing a beneficial interest transfer to myself personally and doing that before the 25th of June. The snag on that is, is that because despite the fact that it's kind of changing hands, but only behind the scenes, it does trigger tax,

Polly Reitze (13:59):

The property transfer tax?

Jeff Fitzpatrick (14:02):

No, the capital gains tax you capital gains tax. Yeah. I'm effectively selling my own property and my holding company to myself personally.

Polly Reitze (14:10):

But if that's happens

Jeff Fitzpatrick (14:11):

Before file, I file that 24th with CRA, it does not go through the land transfer process. So there's no property transfer tax because it's just paperwork behind the scenes. So it's paperwork being filed with CRA and it is a notional transfer. Well, it is. It's a formal transfer from a CRA standpoint, but not on the land registry. It would still sit and then I sit behind the scenes as the beneficial owner, even though the title is still in the holding company's name. And

Polly Reitze (14:40):

Would you still sell

Jeff Fitzpatrick (14:41):

Or So that's a good question and that's something that a lot of people need to bear in mind. And this kind of bleeds into the whole discussion related to the flipping taxes because the benefit of me doing that right now, despite the, that I would have to pay tax, even though I'm not selling the property, I don't have any sale proceeds to pay tax. I got to dip into the savings order to pay the tax. But what that does is that does two things. Number one, it gets it into my personal hands, which then means I have the benefit of that $250,000 limit that I would be captured within the 50% inclusion rate. And then the other advantage is, is that I reset my cost base. So I bought this probably maybe 12 years ago, like the idea it was cheapest chips when I bought it. Now it's worth much more when I buy it personally, my new cost base is much higher because I paid the taxes on the amount from when I originally acquired it all the way up until today when I did the transfer. So that then when I sell it later, my cost base would be reset. And so the taxes would be more limited on a go forward basis. Does that make sense?

Polly Reitze (15:38):

Yeah, kind of. It's a lot. So it'll be set to today's value.

Jeff Fitzpatrick (15:42):

Exactly right. It'll be reset it today. Exactly. You my planning on selling it. So the big question is do I think it's going to go up in value or can I utilize the money in a better way, the cap rate

Polly Reitze (15:54):

Or get higher rent,

Jeff Fitzpatrick (15:55):

Exactly. Or can I buy another property and maybe get a better return or whatever. These are all the different types of discussions that I'll try, I'll have with myself to figure out whether it's a good idea in order to sell it or not.

Polly Reitze (16:06):

This property. Yeah. Sorry, Jeff, it sounds like it's under 500,000, the value of your property or 600,000?

Jeff Fitzpatrick (16:14):

I bought it for 160,000. I think it's probably worth about four 50.

Polly Reitze (16:17):

Okay. So have you figured out if you did that transfer, what it would ideally save? Ideally save you. Did you figure out the number? I've

Jeff Fitzpatrick (16:26):

Spoken to my accountant about it.

Polly Reitze (16:28):

Roughly. Roughly.

Jeff Fitzpatrick (16:29):

I think it'll probably save maybe 20 to $30,000 worth of tan. Yeah. Okay.

(16:37):

And I know that that doesn't sound like a significant amount. And that's the reason that I seem to think that really where the rubber gets the road on these changes is on the commercial side because you're dealing with some very significant values and taxes and it's not just a couple thousand dollars. It's like the tax exposure could be on the hundreds of thousands or millions of dollars or whatever. And so I think probably the accountants are probably fairly busy on the commercial side, and I could see how someone would be interested in doing something creative like a beneficial title transfer or something like that in the spirit of paying the taxes now reset the cost base and then on a go forward basis you've got a higher cost base. So then if you sell it later, the other thing that I'm trying to figure out just in terms of my own personal decision to sell that property is the new BC flip tax and then the federal flip tax. So the federal flip tax came in the 2022 budget and was implemented in 2023. So that one's been around for just over a year. And that was pretty simple, is if you sell a property within the first year, rather than it being treated as a capital gain, it's being treated as income. And so

Polly Reitze (17:45):

Tax is

Jeff Fitzpatrick (17:47):

Income. So the capital gain, not gain

Polly Reitze (17:49):

Capital

Jeff Fitzpatrick (17:50):

Gain. Right now you get a 50% tax free and 50% is taxable right after June 25th. That becomes that sooner that we just described. But if you buy a property and then you sell it within the first year, and that actually applies to your principal residence as well. So if you buy something, move into it and then sell it within the first 365 days, now all of a sudden it's not available to be a capital gains exemption as a principal residence because it's being treated as income.

Polly Reitze (18:17):

There's a few exemptions on that.

Jeff Fitzpatrick (18:19):

There are,

Polly Reitze (18:20):

Yes. Yeah,

Jeff Fitzpatrick (18:21):

There are.

Polly Reitze (18:23):

Yeah.

Jeff Fitzpatrick (18:24):

So I mean it kind of depends. I think divorce and a death in the family and these types of things. There's some different exemptions. I know that on the BC flip tax is a little different. There are some exemptions in terms of if there's a death in the family, if you have a divorce, for example, if there's a bankruptcy, you can apply for an exemption. But the BC flip tax is actually a little bit more broad than the federal. The federal only captures the first year. The BC flip tax captures the first two years. And the way that that would work is that the BC taxes, in addition to any additional taxes you would pay, so you can get two layers of taxes here. You can get you'd hammered with the flip tax on the federal level, and then you can also get hit with the provincial as well. And in the provincial case, if you sell within the first year, then you have a 20%

(19:19):

And then it scales down to zero. Once you hit the two year mark, the implementation date is set for January 1st, 2025. And the language that came out when they first introduced this suggested that if you bought something in 2024 and then sold it after the implementation date that you're going to get hit. So this is kind of a retroactive scenario where if you buy something right now and then you sell it once the tax gets implemented, if you bought it within the past year. So it's not like this rule starts on the 1st of January, 2025, it's kind of already here.

Polly Reitze (19:51):

It's retroactive.

Jeff Fitzpatrick (19:52):

If you buy something now and then sell something next year at this time, you get hip and it's also a two year, so it'll scale down the 0% flip tax once you get to after owning the asset for two

Polly Reitze (20:07):

Years, they do say that. Another exemption for that is if you add more doors to the property. So if you develop it,

Jeff Fitzpatrick (20:15):

That's true

Polly Reitze (20:16):

To be higher density.

Jeff Fitzpatrick (20:18):

There are, yeah. If you put it under development. And of course there's the new rules that are being put forward by the province that all the municipalities and the process of trying to implement right now. So it'd be interesting to see how the whole landscape is changing quite dramatically

Polly Reitze (20:32):

And quickly, quickly, like you said. Yeah, sure. It it's hard to keep abreast of it and I'm glad you're in my office. You got, it's there. My gosh. Totally. We have lots to, we'll be calling you all the time. What's the condition put in this offer because of Yeah.

Jeff Fitzpatrick (20:49):

Well there's tenancy changes too

Polly Reitze (20:51):

Now. Oh my God. Airbnb, oh

Kim Taylor (20:53):

My gosh.

Jeff Fitzpatrick (20:54):

Lot. To take the four months notice and you have to go onto an online portal. I mean, and the rescission period was just introduced. We've got lots to keep up with, no question.

Kim Taylor (21:06):

Yeah, I'm sure there are lots more coming down the pipeline as well. As soon as we figure out these ones,

Polly Reitze (21:14):

They don't

Kim Taylor (21:14):

Stop, use something else.

Jeff Fitzpatrick (21:15):

Exactly.

Kim Taylor (21:18):

They don't. They change. They keep going. They keep adding more taxes and we keep paying them. Well, that's great. And so thank you. So you've offered some creative solutions, which is great. I don't know, do you have anything else you want to add?

Jeff Fitzpatrick (21:33):

Well, I think one common question that people have got out in the industry is, should I plan to try to sell right now in anticipating these changes where we're at, given the fact that we're at the end of May now and that these changes are going to be implemented in the next month. Having a tenanted property pretty much answers that question for you already because you're not, you won't the tenant out in time for these changes to get implemented. So what you're pretty much asking is for a buyer to be able to take on a tenanted property, whether they want a tenant or not, it's a tough one. And so that probably creates a little bit of a tricky situation in terms of probably you're having to negotiate with the tenant to get them out before the 24th of Jan. And that's kind of a relatively tight timeline. And so I think it's kind of a function of it is what it is. The way that they introduced this is kind of curious. They tabled the bill actually done Bill C 69 is the new budget bill. And the funny thing is they don't actually have the capital gains changes in the bill yet. So there was an article on the Toronto Star that was talking about where's the capital gain stuff within the

Polly Reitze (22:38):

Bill. So if it's not on paper, it's not real.

Jeff Fitzpatrick (22:42):

And so I think that actually spooks some curiosity in terms of why are they going to change it. And there's been some chatter in terms of the government actually having to explain this. And I think that the way that it was presented initially was is that it was effectively going to hit a very small amount of Canadians and the intent was is for it to be focused predominantly on the affluent class of the population. But I think that now that they've dug into it, there was a stats can report that was looking at actually the broader implications of this. And really what it means is, is that entrepreneurs who have holding companies and maybe some families that have cottages, the family's thinking about selling or whatever, actually it's turning into a little bit of a broader landscape. They seem to think that originally it wasn't really going to have such a broad impact on many more Canadians.

(23:34):

So I think that to that end, I think it's kind of being viewed as being a little unpopular. No one really wants to pay more taxes. And certainly if it was just exclusive to one small segment of the population, then maybe it made sense. But if you're starting to realize that it's going to have a much broader impact to many, many more Canadians, one person was talking about, well, the fact that they didn't put it in the bill, does that mean they're going to cancel it? And the government's come out and said, no, actually they are in the process of dotting the i's and crossing the T's and it will all be introduced. So the expectation is that we're not going to see the government back off of this. So that's one common question is will it be introduced? It doesn't even implemented yet. They don't have crown ascent on this yet.

Kim Taylor (24:15):

They don't typically give you these kind of warnings when they introduce the foreign buyer tax. GST got days, remember all that. Right? All of these things, we don't typically get these kind of warnings. So I find it very interesting.

Jeff Fitzpatrick (24:29):

Well, when they introduced the property transfer tax, remember when the threshold for the property transfer tax changed on the top end? That was like instant week immediate.

Polly Reitze (24:39):

It's the next day. And there was deals in,

Jeff Fitzpatrick (24:43):

I had a client that was buying something for four nine and that $1 million extra over this million threshold. It's like, whoa, wait a second. I wasn't planning on paying that extra

Polly Reitze (24:53):

Amount. There was no exemption. The deal's

Jeff Fitzpatrick (24:55):

Done, deposits we're closing on this and now all of a sudden they get a bigger tax bill. So probably what you said is totally true, or you said they normally don't give us, at least in this case, they've given us some planning time to try to be able to put some stick to the accountant, try to talk to some sellers or whatever. And I think that it's possible that we could see some dialogue happening between realtors in the spirit of trying to accelerate dates to try to get ahead of this. And there's also negotiation practices here now where I say, oh, I can close before the 24th and then maybe that can get you a better deal or whatever. So here's a bonus, there's still some things that you can do in the industry in order to take advantage of this, but the train's running out of the station here pretty quick. So we're going to be living in a new world in terms of the capital gains inclusion rate. And I guess if the conservatives form government, is there a possibility that they would backtrack on this? Hard to say.

Polly Reitze (25:45):

It depends who gets in. Right? Maybe they will new party. Yeah, absolutely.

Jeff Fitzpatrick (25:52):

Maybe we live in interesting times. That's what's going on.

Polly Reitze (25:56):

I got to keep my money under my mattress. I think, I dunno,

Kim Taylor (26:03):

Every day I change

Polly Reitze (26:04):

It or I have to change it to my kids' names. This cousins's names. No, I'll talk to. So that is

Jeff Fitzpatrick (26:10):

One thing that people are talking about.

Polly Reitze (26:12):

Yeah. Put it multiple names.

Jeff Fitzpatrick (26:14):

If you have an asset, you don't have the time to sell it, particularly if it's corporately held, maybe you want to transfer it into your children's name. They hold it as an investment, they reset. The

Polly Reitze (26:25):

Cost rates can speak to a professional, but you

Jeff Fitzpatrick (26:26):

Definitely need to speak well, you need a professional in order to tend to the paperwork on that anyway. And I think it

Polly Reitze (26:32):

Would take a couple of weeks to do anyways.

Jeff Fitzpatrick (26:34):

These are just ideas. Everybody's going to have a unique situation where it might make sense, it might may not. And the good news is that if you're paying taxes, it means you're making money. You made a profit. And

Polly Reitze (26:51):

So I hate it when people say that, but yes.

Jeff Fitzpatrick (26:53):

Yeah, fair enough. But I mean, if you're planning on hanging onto the asset longer term, there's a good chance that the gain on the asset is going to be greater than the new tax liability you're going to be looking at. Right. And so this isn't necessarily a function of everybody in Canada should sell their investment properties to get in under the new tax regime. It's like, okay, well if you've got a good asset, you hang onto it. Okay. It's going to be subjects in tax later. Okay. I mean,

Polly Reitze (27:16):

There is a lot of condos downtown on the market right now and they're not selling. Yeah.

Kim Taylor (27:25):

Well, it'll just become the new normal.

Polly Reitze (27:28):

Well, that was very informative, Jeff. Thank you. Yeah, thank you

Jeff Fitzpatrick (27:31):

For having me.

Polly Reitze (27:32):

Totally think you'll have to become a regular come back. I'm confident. Well spoken to

Jeff Fitzpatrick (27:37):

Talk about That's for

Polly Reitze (27:38):

Sure. Yeah. With every new policy just coming back

Kim Taylor (27:42):

On. Yeah, there's a lot to talk about.

Polly Reitze (27:44):

We'll have you as guest speaker every six weeks. Amazing.

Kim Taylor (27:49):

Well, thank you Jeff, and thank you for listening and joining us today.

Polly Reitze (27:54):

And perhaps Kim, we can offer, if people DM us, if they have specific questions for Jeff, we can pass 'em on. Again, everything we spoke about today, everything Jeff spoke about is not exactly, well, it is professional, but it's legality. Check with your accountant and make sure you cross your T's and dot your i's.

Kim Taylor (28:15):

Sure.

Polly Reitze (28:16):

Yeah. But we'll get Jeff to answer your questions. And again, that was Jeff Fitzpatrick partner at Engel & Völkers in West Vancouver. Thank you, Jeff. Thanks for laughing and we look forward to having you back.

Kim Taylor (28:28):

All right. Okay. Remember to share this episode with a friend. If you know someone who's interested in learning more about these taxes and we look forward to seeing you next time,

Polly Reitze (28:40):

Please. And give us a rating. Thanks for everybody. We can cut that.

Kim Taylor (28:48):

No, we're saving it for the bloopers.

Polly Reitze (28:50):

No. Yeah, the bloopers show.