Conservative
platform can impact real estate
Saskatchewan REALTORS® ready to work with
new government on tax
issues and property rights
January
25, 2006 – Several planks included in the Conservative Party platform could have an impact on
real estate and encourage
real estate as an option for small
investors in Canada, according
to the Saskatchewan Real Estate
Association (SREA) The
Association’s member
REALTORS® will be ready to work
with The Canadian Real Estate Association and the new government
on several public policy priorities during the next session of Parliament.
Real estate is
a major factor in the Canadian economy. A study prepared by Clayton Research for CREA shows that between 2002 and 2004, residential sales made through the Multiple Listing Service® generated
$10.8 billion in ancillary consumer spending annually.
GST adjustment
Saskatchewan REALTORS® point out that the Conservative proposal to reduce the Goods and
Services Tax (GST) will reduce the
cost of new homes, and the cost of services associated with a real estate transaction. The proposed first-phase reduction in GST would save a homeowner
$3,000 on a new home selling for $300,000. Setting the GST
rate at five per cent as the Conservatives
propose would restore the
effective rate of federal sales taxes on new homes to
the level that applied prior
to the introduction of the GST in 1991, when the new rate is combined with the
new housing rebate.
“It all helps keep housing affordable”
Bill Madder, Executive Vice
President of the SREA.
Capital gains
The
Conservative Party platform
also calls for the elimination of capital gains tax for individuals who reinvest profits earned from selling
real estate or financial investments within six months. The move
would apply to physical and financial
assets, potentially benefiting people who sell stocks and bonds, or properties such as cottages and family businesses.
Currently,
Canadians who have financial assets or property other than a principal residence must pay tax on the
capital gains resulting from
the sale of a financial asset or property.
According
to the National Commercial Council
(NCC) of The Canadian Real Estate Association,
small-scale investors are often unable to “grow” their real estate investments because of the tax consequences when selling a small asset to buy a larger one.
“A capital gains rollover provision for small-scale investors, which REALTORS® have been proposing for several years, would introduce
greater flexibility into the small-scale
residential rental investment sector,” added Madder “If this tax change is implemented effectively, it will encourage more Canadians to
look at real estate investment opportunities, especially with small and medium sized income opportunities.”
Property rights
The
Conservative Party platform
also proposes to amend the Constitution to include the right to own property, and promises to enact legislation to ensure that full, just and timely
compensation will be paid to all persons who are deprived of personal or private property as a result of any federal government
initiative, policy, process,
regulation or legislation.
”Property owners
often take their property rights for granted, but all levels of government enact countless rules and regulations
that restrict property rights,” Madder says “REALTORS® believe that property
rights should have the same legislative
status as other rights in Canada.”
The Canadian Real Estate Association
has also surveyed Canadians about property rights issues. In the 2005 survey conducted by Pollara Research, the majority of Canadians polled (88%) said it was important or very important that compensation be paid to a property
owner when restrictions are
placed on the use of their land. More than 90 per cent of respondents said it was
important or very important that
compensation be paid when property was
expropriated.
The Saskatchewan Real
Estate Association (SREA) is one of the largest
single-industry trade organizations in
About The Canadian Real Estate Association
The Canadian Real Estate Association
(CREA) is one of Canada’s largest single-industry trade Associations, and represents more than 83,000 REALTORS® across Canada. CREA’s primary mission is to represent its members at
the federal level of government and to act as a watchdog on national legislation affecting or impacting the real estate industry.
For further information, contact:
Bill Madder
Executive
Vice President
Saskatchewan Real Estate Association
306-373-3350
Pierre Beauchamp, FRI(E)
Chief Executive Officer
Canadian
Real Estate Association
613-237-7111