A story of Capital Gains Friend is a plumber Started own business working out of his truck Was moderately successful, worked very hard Had to take a job working in a bar at night to make ends meet Eventually plumbing business could stand on its own
Business went reasonably well, made about $60k a year in 2000 Saved up a little money ($10K), and bought a small strata warehouse in BC for $250K Commercial Mortgage was $2,000 a month @ 7.5% Friend skipped many paycheques to make mortgage Had to get second job on occasion
Plumbing business grew Hired an apprentice Quit second job Income kept growing More employees Business was solid Took home about $100K in 2010, but warehouse mortgage was also getting paid
After 20 years, in 2020 decided to sell the small strata warehouse, which was paid off Due to Govt real estate bubble, small strata now worth $600K Sold it at $600K and had profit of $350K on the strata after 20 years investment
In 2020 friend had to pay approx $95,000 in capital gains on sale of strata warehouse In 2024 that sale would require $105,000 in capital gains 20 years investment 20 years struggling to survive 20 years of risk, govt fees, taxes, payroll etc $12,000 per year “profit”
Govt says my friend the plumber is a wealthy Canadian and demands he pay more, instead of reducing Govt spending. The plumber has no pension, unlike Govt employees. Taking more from the plumber to pay Govt pension is unsustainable Canada is on a path of implosion
@NyaPfanner If he has no pension, does that mean he hasn't been contributing to his RRSP? If so he could make a lump sum contribution based on his past accumulated (non) contributions to his RRSP from the sale of the property to reduce his taxes.
@NyaPfanner Your "profit" does not account for inflation over that period, including local cost of living. They lost money
@NyaPfanner Lifetime Capital Gains Exemption. He needs a better accountant
@NyaPfanner Liberals lie when they say this capital gains tax increase will only affect 0.13% of Canadians: It will effect everyone in the middle class who own 2 or more properties.
@NyaPfanner Not sure your point about being a plumber? Many of us do not have pensions or benefits. Plumbers make a good living and if they have not involved in RRSPs and TFSAs, and saved in non-registered then that is on them.