The more I think about it, the more I find it fiscally unfair to overtax small owners of duplexes and triplexes as the Trudeau and Legault governments have just done by increasing, starting June 25, the tax on the portion of the capital gain that will exceed the $250,000 mark.
There are currently 279,488 duplexes and triplexes in Quebec. All or almost all of these small income properties are owned by modest, middle-income taxpayers.
Many of them also count on their duplex or triplex to earn a little extra income, while counting on the long-term appreciation of the value of their property to build a sort of RRSP for their old days. .
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DIY BEAVERS
These modest-income homeowners, many of whom must play “handyman” to maintain and repair their property as necessary, are light years away from the very wealthy taxpayers who earn colossal sums of money from the capital gains made. on their investments in stocks, funds, stock options, etc.
This is why I recommend that Justin Trudeau and François Legault show fiscal empathy towards duplex and triplex owners, by excluding them from the new tax measure on capital gains.
WHY EXCLUDE THEM?
Because at the origin of the implementation of the annual surcharge on capital gains which exceed the $250,000 mark, Justin Trudeau and his Minister of Finance, Chrystia Freeland, wanted to “improve tax fairness” by forcing the rich to pay more tax on capital gains.
The reason? With capital gains, the wealthy “reap disproportionate benefits” compared to the middle class.
Currently, only half of capital gains are subject to tax. As of June 25, we will continue to pay tax on 50% of the first $250,000 of capital gains. But regarding gains exceeding the $250,000 mark, two thirds will become taxable and no longer just 50% of said capital gains.
According to the 2025 projections made in the federal budget which was tabled last week, Minister Freeland, with her new capital gains surtax measure, targets approximately 40,000 wealthy Canadian taxpayers, who are expected to declare capital gains greater than $250,000.
The latter represent only a small fraction of taxpayers, or 0.13%. And they earn an average gross income of $1.4 million (capital gains included). You read correctly 13 hundredths of 1% of all taxpayers.
Of the 40,000 very wealthy Canadian taxpayers initially targeted by the capital gains surcharge, how many rich Quebecers are there? Let’s put 8000.
We are therefore talking here about “select” taxpayers whose annual income is exorbitant compared to the modest owners of Quebec duplexes and triplexes.
photo julien mcevoy
THE TRAP
The average price of a duplex in Quebec increased from $210,734 in 2008 to $550,787 in 2024, for a gain on paper of $340,053 in 16 years.
For its part, the triplex saw its average price increase further, recording a gain of $452,010. The average price of the triplex is $731,686, compared to $279,676 in 2008.
That said, when they sell their duplex or triplex, these small owners will therefore be fiscally treated as very rich taxpayers, and the two governments, Quebec and Ottawa, will overtax them on the retroactive appreciation of their modest income properties.
This is downright unfair to them! Especially since the sale of a property must be done in one transaction, unlike a portfolio of shares which can be divided up in such a way as to limit capital gains annually below $250,000.
