In Canada, there's a capital gains tax exemption for your (owned) primary residence. If I wanted to live in a given place, it would be stupid to buy the place,

In Canada, there's a capital gains tax exemption for your (owned) primary residence. If I wanted to live in a given place, it would be stupid to buy the place, rent it out, and rent another place myself with the rent money minus the income tax I paid from it. When selling the place, I owe capital gains taxes on it. Taken together, that ends up being a worse deal for me than merely buying what I need and using it for myself, tax-free. Of course, what renting gives you is the flexibility to live in a smaller place and avoid overpaying for extra space that you might want to use at a later time. Still, the savings from renting a smaller place have to be greater than the tax expenses that I get charged for renting out.