Investors are calling on the Canadian Revenue Agency (CRA) to allow for tax concessions on any losses incurred following the sale of condos.
Investors believe that any monetary losses incurred in condos should be tax deductible. As the CRA continues to crack down on condo flippers as part of a special project, irate investors believe the taxman should consider all income and expenditure.
Commenting on CREW’s report that the taxman is targetting condo owners, one reader said that the CRA “cannot have it both ways and if it assesses such gain (profit upon selling), then it has to allow for loss too.” Adding that more investors are losing cash on pre-sale condos, the investor says any loss should be as part of a deductible against income.
Sam Elgohary, real estate broker specialising in pre-construction condos, says flipping in this property type is now “dead” and investors need to adopt to today’s new environment. “Investors need to see condos as long-term investment, there are not short-term anymore. You need to build equity in them,” he tell CREW.
“I would advise a minimum of holding them for a minimum of five years.” Since last April, almost 600 tax audits have been undertaken by the CRA in its new “condo project.” Almost half of these audits led to penalties.
From: Canadian Wealth Magazine, April 2014; image courtesy kitchencabinetsfactory.ca
March 31, 2014