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Buying v/s Renting

Buying v/s Renting

Old Apr 20th 2012, 4:32 pm
  #61  
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Default Re: Buying v/s Renting

Originally Posted by Former Lancastrian View Post
That seems pretty good and considering the value of the home. Im guessing around half or more is the school tax part or portion.
It's alright, but luckily the assessed value of the property has lagged considerably behind my estimation of market value (based on local comparisons) over the last few years. But, as ever, I don't mind paying tax.
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Old Apr 20th 2012, 4:37 pm
  #62  
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Default Re: Buying v/s Renting

Forgot about the farm property or "hobby" farm status - that's a great angle. I had a friend that tried it by investing in cattle and let them graze on his property. If I remember correctly, they had be on the property for a certain amount of time and you had to have a minimum amount. Needless to say, it didn't work out but I got a great deal on a freezer full of beef.

In the Okanagan, I think you need a minimum parcel size with a minimum amount of fruit trees and you're rockin'

It's alright, but luckily the assessed value of the property has lagged considerably behind my estimation of market value (based on local comparisons) over the last few years
You're lucky, in the Okanagan you're lucky to get the assessed value and I believe the assessed values are coming down because of it.

Last edited by Hawk13; Apr 20th 2012 at 4:44 pm.
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Old Apr 20th 2012, 4:38 pm
  #63  
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Default Re: Buying v/s Renting

Originally Posted by Hawk13 View Post
Oh, and on the subject of GOLD and capital gains, that only applies if you plan on staying here. And if you think the government wouldn't try and take their pound of flesh out of you with property, you're mistaken.
Care to explain?
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Old Apr 20th 2012, 4:49 pm
  #64  
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Default Re: Buying v/s Renting

On what part?

Aviator had it right with
Not to be forgotten, there is no CGT on any gain in the value of your primary residence, investment gains are subject to CGT or full rate of tax depending on the investment and can push your marginal rate through the roof. You could (and likley would) end up with a hefty tax bill on investment gains.
If you leave the country and then liquidate the gold, it depends where you're going.

As for the house, that's true on your primary residence but if you leave it to your kids they'll get dinged.

The government allows gets their pound of flesh.
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Old Apr 20th 2012, 5:09 pm
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Default Re: Buying v/s Renting

Originally Posted by Novocastrian View Post
It's alright, but luckily the assessed value of the property has lagged considerably behind my estimation of market value (based on local comparisons) over the last few years. But, as ever, I don't mind paying tax.
Just for interest of those reading this thread and taxes on 1 mill valued homes look at the taxes on this one


Property Type:
Residential
Style:
Two Storey
Year Built:
1989
Living Area:
4236 Sqft
Basement Area:
890 SqFt
Rooms Above Grade:
14
Bedrooms:
4
Full bathrooms:
3
Half bathrooms:
1
Gross taxes:
$13,377 Yes $13,377
Tax year:
2011
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Old Apr 20th 2012, 5:25 pm
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Default Re: Buying v/s Renting

Originally Posted by Hawk13 View Post
On what part?

Aviator had it right with

If you leave the country and then liquidate the gold, it depends where you're going.

As for the house, that's true on your primary residence but if you leave it to your kids they'll get dinged.

The government allows gets their pound of flesh.
Deemed disposition if you leave the country. Your assets are valued as if you had sold them (even if you don't) and you are taxed accordingly. If you sell your primary residence after leaving the country, you could end up being taxed on this as well.

There is no gift tax or death duty in Canada, if you leave it to the kids, they sell their primary residence if they have one and move in to the property they have been left.
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Old Apr 20th 2012, 5:31 pm
  #67  
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Default Re: Buying v/s Renting

Originally Posted by Former Lancastrian View Post
Just for interest of those reading this thread and taxes on 1 mill valued homes look at the taxes on this one


Property Type:
Residential
Style:
Two Storey
Year Built:
1989
Living Area:
4236 Sqft
Basement Area:
890 SqFt
Rooms Above Grade:
14
Bedrooms:
4
Full bathrooms:
3
Half bathrooms:
1
Gross taxes:
$13,377 Yes $13,377
Tax year:
2011
Out of curiosity, where is that one? BTW it's about twice the size of mine, but I have 0.75 acres in the best possible area of RH.
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Old Apr 20th 2012, 5:42 pm
  #68  
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Default Re: Buying v/s Renting

Originally Posted by Novocastrian View Post
Out of curiosity, where is that one? BTW it's about twice the size of mine, but I have 0.75 acres in the best possible area of RH.
If I told you that then I would have to hunt you down etc as it might reveal my location
Its not in Vancouver, Montreal or the GTA area though.
Smaller houses of similar value in my city where taxes range from $8000 upwards but it is gross amount.
It all depends on the neighbourhood, lot size can be a factor but they base taxes on the asessed value of the home where I live.
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Old Apr 20th 2012, 6:37 pm
  #69  
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Default Re: Buying v/s Renting

Originally Posted by Former Lancastrian View Post
It all depends on the neighbourhood, lot size can be a factor but they base taxes on the asessed value of the home where I live.
The assessed value in Ontario is done by MPCA and it based on location, lot size, living space, age of house, quality of construction & finish and extras like a pool, outhouses etc.

Perhaps you're thinking of replacement value for insurance purposes?
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Old Apr 20th 2012, 6:45 pm
  #70  
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Default Re: Buying v/s Renting

Deemed disposition if you leave the country. Your assets are valued as if you had sold them (even if you don't) and you are taxed accordingly
I don't pretend to be right up on this stuff and need more enlightenment. So how do they know what you have? A friend of mine bought $10K worth five years ago so I'll ask him what documentation was involved. I'm curious as to how this works 'cus what if you were sell all your gold jewelry, do you somehow pay CGT on that?

What if you bought a bag of diamonds? or what if your dad left you his mint 1967 E-type Jag and you decided to (shame on you if you did) sell it, they don't ding you CGT on the difference of what your dad payed for it and what its worth now.
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Old Apr 20th 2012, 6:47 pm
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Default Re: Buying v/s Renting

Originally Posted by Novocastrian View Post
The assessed value in Ontario is done by MPCA and it based on location, lot size, living space, age of house, quality of construction & finish and extras like a pool, outhouses etc.

Perhaps you're thinking of replacement value for insurance purposes?
Yes I guess my wording wasnt the greatest

Several factors go into assessing your property:
■It is assessed at the “current market value”, or the price your property could normally sell for on the real estate market. This is done for a “reference” year which is normally the year after the last general assessment.
■The City assesses the value of both your land and buildings to get a total property assessment. It decides your land’s value by studying sales of similar properties and comparing lot size, local improvements, location, and other factors which influence its sale value. It decides your building’s assessed value by its age, size, condition, construction and materials. Even if you built it yourself, the City judges your building by the same criteria as other buildings so it can equitably assess all similar buildings.
■The City factors depreciation for normal deterioration into your building’s assessment.
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Old Apr 20th 2012, 6:47 pm
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Default Re: Buying v/s Renting

Originally Posted by Hawk13 View Post
I don't pretend to be right up on this stuff and need more enlightenment. So how do they know what you have? A friend of mine bought $10K worth five years ago so I'll ask him what documentation was involved. I'm curious as to how this works 'cus what if you were sell all your gold jewelry, do you somehow pay CGT on that?

What if you bought a bag of diamonds? or what if your dad left you his mint 1967 E-type Jag and you decided to (shame on you if you did) sell it, they don't ding you CGT on the difference of what your dad payed for it and what its worth now.
Should answer your questions
http://www.cra-arc.gc.ca/tx/ndvdls/l.../menu-eng.html
http://www.cra-arc.gc.ca/tx/nnrsdnts.../lvng-eng.html
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Old Apr 20th 2012, 8:31 pm
  #73  
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Default Re: Buying v/s Renting

Originally Posted by Hawk13 View Post
On what part?

If you leave the country and then liquidate the gold, it depends where you're going.
This might be true if you owned the gold prior to becoming tax-resident in Canada and leave again within 60 months. Otherwise you have a deemed disposition when you leave Canada and any capital gain is captured.

As for the house, that's true on your primary residence but if you leave it to your kids they'll get dinged.

The government allows gets their pound of flesh.
When you die your principal residence goes into your estate at fair market value. If your kids subsequently sell it then they only pay tax on a capital appreciation between the date of death and date of sale. The increase in value whilst it was a principal residence remains tax-free.
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Old Apr 20th 2012, 8:45 pm
  #74  
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Default Re: Buying v/s Renting

This might be true if you owned the gold prior to becoming tax-resident in Canada and leave again within 60 months. Otherwise you have a deemed disposition when you leave Canada and any capital gain is captured
OK, I get that but must be missing something, how do they track that? Say my friend has five gold coins that he bought years ago and is planning on going to say Australia for work for four years and sells me one of his gold coins. He keeps the other four as he plans on cashing them in when he retires 'cus he didn't believe in RRSP's. When to they capture the capital gains? and how would they capture the CG if I cashed in his gold coin when I was going thru retirement in say the next 5 years?

The increase in value whilst it was a principal residence remains tax-free
Interesting, why then does everyone moan and groan about how the government grabbed when they sold their parents home?
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Old Apr 20th 2012, 9:00 pm
  #75  
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Default Re: Buying v/s Renting

Originally Posted by Hawk13 View Post
Interesting, why then does everyone moan and groan about how the government grabbed when they sold their parents home?
You are probably talking about the UK. The above is talking about Canada. Different jurisdictions have different rules.

I appreciate I may be making an incorrect assumption.
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