4 ms·

Is a 'tax residential address' that a Canadian thing your guaranteed to only have one of world wide and it would never make sense to live at an address other th

by cwmma 10y ago

Is a 'tax residential address' that a Canadian thing your guaranteed to only have one of world wide and it would never make sense to live at an address other then your 'tax residential address' for legitimate reasons ?

crdb 10y ago
Well, I can't speak for Canada, but in most countries I've lived with the exception of the UK (non-dom rules) global income is taxed in your primary residence. So if your main economic activity is in Singapore and you declare your residence there so as to take advantage of its lenient tax rates (for example no capital gains tax), your Canadian home is not your primary tax residence and you should get hit by the land tax. Conversely if you declare that you live in Canada whereas you're busy making a million a year in Dubai, that million ought to be taxed according to Canadian tax law as if you resided there. There's plenty of rules already in existence to determine what is your primary tax residence as far as taxes are concerned, precisely to stop, say, a French resident from incorporating in Switzerland, getting paid into the structure, and not paying tax on his income (he can always try not to declare it, but then he becomes a criminal hoping that the rule of law is not thorough).
- hackerboos 10y ago
  Claiming a property as your main residency is not the same as claiming to be resident in Canada for tax purposes. You need only stay in a property for 1 day a year, you need to spend much longer in Canada (183 days in that tax year). This allows foreign based property speculators to avoid capital gains on property.
  - crdb 10y ago
    Right, then let me reword, since I used the wrong wording: if you are resident in Canada for tax purposes, wherever you are resident is tax free if you own it. Otherwise - including a single day residency a year - it is taxed.
hackerboos 10y ago
That's the problem. This was recently pointed out by the Globe and Mail investigation into real estate tax evasion in Vancouver. Many people are claiming a property as their main residence whilst not staying in said property for more than a few weeks a year (main residence for these people is abroad). The unpopular solution would be to charge capital gains on all property, irrespective of being your primary residence. That would certainly cool a speculative market but I doubt such a measure would be supported by Canadians.
- crdb 10y ago
  > real estate tax evasion in Vancouver If your problem is tax evasion, the solution is enforcement. If it is a big problem, it will pay for itself when solved.
  - Kadin 10y ago
    Calling it "tax evasion" is probably incorrect, since foreign owners are exploiting the rules in a way that is technically correct, but not anticipated. The solution is first to fix the rules, and then, of course, to enforce them. Obviously the long-term solution is to assume that people will always exploit any tax law as aggressively as they can, and that there's a basically-unlimited supply of people looking to park money in low-tax jurisdictions if they are allowed to do so. I don't think this was necessarily widely appreciated when many jurisdictions' tax laws were written.
    - hackerboos 10y ago
      No it is evasion. CRA have launched an investigation. http://www.theglobeandmail.com/news/politics/cra-launches-review-of-bc-real-estate-speculators/article31847258/ http://www.theglobeandmail.com/news/politics/cra-launches-re...
bbrazil 10y ago
In Ireland that's called a "principal private residence" or PPR. There are cases where it'd make sense to live elsewhere though not legitimately, for example the rent-a-room scheme (can rent a room for up to 1k/month tax free) only applies in your PRR. So if you actually lived elsewhere that's a significant fraudulent tax saving if you're a one-property landlord.

by cwmma 10y ago

crdb 10y ago

Well, I can't speak for Canada, but in most countries I've lived with the exception of the UK (non-dom rules) global income is taxed in your primary residence. So if your main economic activity is in Singapore and you declare your residence there so as to take advantage of its lenient tax rates (for example no capital gains tax), your Canadian home is not your primary tax residence and you should get hit by the land tax. Conversely if you declare that you live in Canada whereas you're busy making a million a year in Dubai, that million ought to be taxed according to Canadian tax law as if you resided there. There's plenty of rules already in existence to determine what is your primary tax residence as far as taxes are concerned, precisely to stop, say, a French resident from incorporating in Switzerland, getting paid into the structure, and not paying tax on his income (he can always try not to declare it, but then he becomes a criminal hoping that the rule of law is not thorough).

hackerboos 10y ago
Claiming a property as your main residency is not the same as claiming to be resident in Canada for tax purposes. You need only stay in a property for 1 day a year, you need to spend much longer in Canada (183 days in that tax year). This allows foreign based property speculators to avoid capital gains on property.
- crdb 10y ago
  Right, then let me reword, since I used the wrong wording: if you are resident in Canada for tax purposes, wherever you are resident is tax free if you own it. Otherwise - including a single day residency a year - it is taxed.

hackerboos 10y ago

That's the problem. This was recently pointed out by the Globe and Mail investigation into real estate tax evasion in Vancouver. Many people are claiming a property as their main residence whilst not staying in said property for more than a few weeks a year (main residence for these people is abroad). The unpopular solution would be to charge capital gains on all property, irrespective of being your primary residence. That would certainly cool a speculative market but I doubt such a measure would be supported by Canadians.

crdb 10y ago
> real estate tax evasion in Vancouver If your problem is tax evasion, the solution is enforcement. If it is a big problem, it will pay for itself when solved.
- Kadin 10y ago
  Calling it "tax evasion" is probably incorrect, since foreign owners are exploiting the rules in a way that is technically correct, but not anticipated. The solution is first to fix the rules, and then, of course, to enforce them. Obviously the long-term solution is to assume that people will always exploit any tax law as aggressively as they can, and that there's a basically-unlimited supply of people looking to park money in low-tax jurisdictions if they are allowed to do so. I don't think this was necessarily widely appreciated when many jurisdictions' tax laws were written.
  - hackerboos 10y ago
    No it is evasion. CRA have launched an investigation. http://www.theglobeandmail.com/news/politics/cra-launches-review-of-bc-real-estate-speculators/article31847258/ http://www.theglobeandmail.com/news/politics/cra-launches-re...

bbrazil 10y ago

In Ireland that's called a "principal private residence" or PPR. There are cases where it'd make sense to live elsewhere though not legitimately, for example the rent-a-room scheme (can rent a room for up to 1k/month tax free) only applies in your PRR. So if you actually lived elsewhere that's a significant fraudulent tax saving if you're a one-property landlord.