$1 Billion Bare Trusts & Capital Gains Tax Flip Flops - Where's the Federal Gov Financial Back Bone?

As a real estate chat community, we didn't really want to get into the political side of things.  But one can't help discuss certain topics that are a bit of a mix of real estate... and politics.  Especially when it has an almost $1 billion dollar impact on Canadians.

On this episode of Real Estate Chat, Robert Ede (http://www.unclebobexplains.com) and Johnder Perez (http://www.johnder.com) talk about two recent flip flops, how they impact real estate, and what the reasoning for them might be.

Bare trusts -- new rules put into place for the 2023 taxation year cost Canadians who filed prudently ahead of schedule nearly $1 billion dollars... only for the Canadian Revenue Agency to announce that this would be waived for the 2023 tax year (but will not be eliminated for future tax years).

What's a bare trust?

The CRA defines a bare trust as “a trust arrangement under which the trustee can reasonably be considered to act as an agent for all the beneficiaries under the trust with respect to all dealings with the trust’s property.”

That means a bare trust exists when someone holds legal title to an asset but it really belongs to someone else. That’s how relatives signing onto mortgages or children adding their names to elderly relatives’ investments get included.

Source:  
The Niagara Independent
CRA’s bare trust flip-flop cost nearly $1 billion
https://niagaraindependent.ca/cras-ba...

Now let's talk about another flip flop: the much hated, demotivating capital gains tax changes.

Basically...

"Right now, the government taxes 50 per cent of capital gains, or profits made from the sale of assets, including stocks and secondary properties.

Freeland is proposing to increase that to two-thirds of all capital gains realized by corporations, and any amount in excess of $250,000 in one year for individuals."

Basically -- the government is finding a way to earn more tax revenue by changing capital gains tax rules... which impact your gains on real estate investments (amongst other things).

Source:
CBC
Freeland moves for separate Commons vote on capital gains tax changes
https://www.cbc.ca/news/politics/capi...

How do these flip flops impact your investments in real estate?

Why do they matter and why should you understand what's going on, even though it leans more towards politics than actual real estate?

Watch this episode of Real Estate Chat to find out -- then let us know what you think in the comments.