Few can debate that these are the most uncertain of times. Wherever one looks around there is discernable political derision, growing economic inequality and most importantly we are in the middle of an unprecedented health crisis.
The million dollar question remains how and where do we go from here? Acknowledging that personal, municipal, provincial & nationally debt are already at undreamt of levels and escalating. Can we as a society afford to ask for greater assistance from our civically elected officials? When much is considered the inevitable answer is a yes.
Many wonder how & when will these debts ever be repaid? Will the central banks of the world encourage the inflation to return in an effort to mitigate the amount of their real debt?
All the while it would seem that the world is living with unprecedented asset valuations. This is especially true regarding all types of real estate. Could this vast reservoir of wealth be a magnet for Government attention?
Simultaneously stock markets remain near their all time highs, as does their high volatility. Meanwhile every equity market continues to sponsor incredible P/E valuations. Here again these are pockets of personal wealth (RRSP & Tax Free accounts) that could easily become the objects of government of interest in an effort to be tter balance the nation’s financial books.
Tens of thousands of baby boomers are retiring monthly. Many are wisely downsizing and surrendering to serendipity by locking down their untaxed residential capital gains in their new residence. This most fortunate generation seems to have intuitively sensed that our general tax status have a better than ever chance of experiencing dramatic change over the next decade?
Could the non-taxed Capital Gains begot from selling your residential home be subject to federal review? Who can really say?
The majority of governments at all levels were already financially struggling before the blowback associated with the COVID 19 quarantines. There is little doubt that Value Added taxes will increase sooner rather than later. Permits, development charges, police fines and sales taxes to mention a few.
The majority of people would agree that the central banks of the world are all ready running their currency presses at full speed. Exponentially increasing the money supply has over the centuries proven to be a princes folly in balancing the nations ledger. Ironically there appears to be no debt large enough or bad enough that the government’s central bank will not buy.
What will all this likely mean to you and your loved ones? Will your primary home become taxable? Will you have to pay an increased percentage of taxes on your secondary residence ?
There is one thing for certain, that all our forefathers can willingly remind us: that debt does not magically disappear. Like the old fairy tale, the pied piper of Hamelin must eventually be paid.
Keep in mind that any of our local professionals can help with any of your real estate questions.
Wishing the best of health & spirits to one and all through these challenging times.