Tax policy discourages the sale of income property and impedes a chain reaction of economic stimulus and job creation – elements that could greatly contribute to a commercial real estate market recovery and community redevelopment. A new Altus Group economic study prepared for The Canadian Real Estate Association (CREA) found that income property sales generate sizeable economic activity in a number of industries, and support job creation.
The study estimates, between 2006 and 2008, the typical multi-unit residential income property transaction in the Greater Toronto Area, Greater Calgary Area and Greater Vancouver Area generated a total of $287,850 in ancillary spending. It also found that 53 jobs were created for every 100 transactions.
“Income property sales generate a substantial amount of spin-off spending,” says Peter Norman, Senior Director, Altus Group. “They create opportunities for trades people in renovations and repairs; fees for professionals; income for industries that produce construction materials; and tax revenue for all levels of government.”
Unfortunately, many income property owners are reluctant to sell and reinvest because of the capital gains tax and recaptured capital cost allowance.
Read the full Press Release, here.