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The tax-advantaged status of your primary residence is also a major driver of the housing bubble in Canada as well.

• ska 4y ago
  Isn't there a lifetime limit of capital gains shelter there much less than the price of homes in the big cities? It's not like the US where mortgate payments are sheltered, right?
  • acchow 4y ago
    No, in Canada there is no limit to the tax exemption for primary residence. > the US where mortgate payments are sheltered Not sure what you mean by this. In the US, the interest on your mortgage is tax deductible up to a certain amount. But the amount of this tax advantage is fixed at your purchase price. You don't get increasing tax savings as the value of your home increases. As for capital gains tax deduction, this is limited to $250k for a single filer, or $500k for married.
    • ska 4y ago
      Ah I see, there is a lifetime capital gains exemption limit but not applied to “primary” residence. There it seems to just be exempt. And yes I meant there isn’t a mortgage deduction but had think while typing.
• Tiktaalik 4y ago
  It could be, though I can't help but notice that the USA levies taxes on primary homes and in many jurisdictions in that country they also have very expensive real estate. (yes there's a sizeable exemption, but not so big that no one would ever pay it) I suspect other issues such as low rental vacancy, not enough supply of homes and very low property taxes are more dominant causes of high Canadian real estate prices.