Comments on: How to Avoid or Minimize Extra Tax From New Higher Capital Gains Tax

By: Ed Rempel

Ed Rempel — Sat, 07 Dec 2024 14:46:24 +0000

In reply to Fire@45.

Hi Fire@45,

The reason selling a property when the mortgage is down to 50% of the value or less works is because you can invest the proceeds in the stock market for higher returns with less tax and no work. Paying a bit higher capital gains tax on selling as a one-time payment would not change that much.

However, your ideas make sense. Instead of selling, you could use the equity for other investments, so that you have less dead equity in your property.

In the end, this type of decision is very proprty-specific, but tmy 50% guidelines is usually about right.

By: Fire@45

Fire@45 — Wed, 15 May 2024 22:15:09 +0000

Hi Ed, If I recall correctly, you mentioned in a past blog, to consider selling investment properties when the equity level reaches 50% or more. Selling might not be as favourable with the announcement of increased capital gains, so for those who still hold rental properties with high equity levels, should we consider just using that equity to purchase diversified stocks or perhaps another rental property rather than selling? I suppose that answer depends on what the current financial environment looks like. I would be curious to know your thoughts.

By: Ed Rempel

Ed Rempel — Mon, 13 May 2024 20:36:48 +0000

In reply to Biker. Thanks Biker. I'm glad it was helpful for you. Ed

By: Biker

Biker — Sun, 12 May 2024 11:56:07 +0000

Ed, an excellent and timely article. I was looking forward for this one.
Thank you a lot!

By: Fire@45

Fire@45 — Sat, 11 May 2024 00:23:33 +0000

Ed, I just wanted to raise awareness of another potential way to minimize the new Capital Gain tax if you own real estate with your spouse. Each spouse gets the 250K @ 50%. For example, my wife and I purchased several residential rental properties in 2006 for about 200k, now these townhouses are worth about 800K with no mortgage. That’s a gain of 300K for each spouse (300K x 2 = 600K) and each spouse gets 250K taxed at 50% and 50K taxed at 67%. This could save you a lot of money if you own real estate jointly.