Vancouver Liberal dodges questions over use of tax exemption on sales of homes over 40
VANCOUVER (NEWS 1130) – Vancouver Liberal candidate Granville refuses to provide details of how he handled more than 40 home sales in the past two decades when tax time arrived.
It comes after NEWS 1130 reported that Taleeb Noormohamed had bought and sold at least 42 properties in the Metro Vancouver area in the past 17 years. Of those, 21 homes were bought and sold at lightning speed, in stark contrast to his party’s promise in this year’s federal election to introduce an anti-rollover tax.
Previously, Noormohamed told NEWS 1130 that some of his dozens of deals since 2005 were related to running a business repairing houses with his parents and then selling them.
Taleeb Noormohamed told me that some of his 40 home sales since 2005 are related to running a business that repairs homes with his parents and then sells them. Our partners at @OMNITelevision asked him today how much he declared as the main rez for taxes – 3 times, no direct answer
– Martin MacMahon (@martinmacmahon) August 31, 2021
In a follow-up interview on Tuesday, OMNI TV asked a simple question: How many of those home sales did you report as your primary residence for tax purposes?
The Liberal candidate dodged the question three times in an interview, just saying that.
“In all my, all my – first of all – I want to say unequivocally, I support all the measures the government has proposed to ensure that we can make housing affordability a priority,” said Noormohamed at OMNI. “I support all of these measures. I know some of the transactions that I have been involved in in the past, if this policy had been in place today regarding the speculation tax, that these properties, or these transactions, would have been subject to these taxes.
“And that’s perfectly fine. I totally support this, because I think it is important that we all do our fair share, and I have made sure that at every moment, that I continue to stand up for these policies, and I will continue to push for these policies one after the other. once I am elected.
“If you declare it as your main residence, you can get by without tax”
The question of how property income was reported is important. When you sell your primary residence, the gains are tax exempt.
You have the option of using this exemption once a year, if you live in this house. And you end up paying a lot more if the profit from the sale of a home is reported as business income or as a capital gain.
“There are three levels of classification,” says tax lawyer Josh Schmidt. “If you are a home buying and selling business, then income is income like any other. So you would pay tax on it, the same way you would pay your employment income, so taxed as a percentage of your tax rate.
“If you have a house that you owned as a capital asset, say you buy a house and you’re going to rent it out to a tenant, for years and years you rent it out, and after 10 years you decide you have finished renting it, you want to buy something else, you sell the house. This house wasn’t a flip, it wasn’t business income – it’s capital property – so you only tax half of the capital gain, so it’s obviously much more beneficial [than declaring it as part of business income].
“Now the third category is your primary residence. Your principal residence is a capital asset for you, under the rules of the income tax of Canada, you are allowed to declare a principal residence per year, which you must usually live, as a principal residence for tax purposes, and pay no tax on any gain in respect of that year.
“The most important point is that if you claim it as your primary residence, you can get away with tax free. “
When OMNI asked Noormohamed if he could tell us if the profits from any of these transactions were classified as business income or capital gains for tax purposes, he simply replied, “I have always followed the appropriate rules on this subject ”.
NEWS 1130 has since asked Noormohamed staff for a breakdown of the tax treatment of each of the more than 40 home sales the candidate has participated in since 2005. According to documents obtained by NEWS 1130, Noormohamed made a profit of $ 4.9 million. $ 3.7 million he has pocketed over the past six years, regardless of transaction costs.