As the new listings plunge to pandemic-year levels, an obvious question is how do we get more properties to market. Where are they, and why isn’t the regular turn over in ownership providing opportunities for new buyers to acquire property?
I’d be curious to see a study about the effects of the capital gains tax on people who own less than four properties. Say an individual held onto a condo or townhome after they got married. It was fairly easy to rent, and the years roll by as one gets busy with family and life. Before you know it there is a couple hundred thousand dollars of equity tied up in the rental. Now if the owner were to sell, they would have to recapture depreciation and pay capital gains. And this is substantial.
If this tax is holding back sellers from releasing their property to market which in turn disallows wealth growth by a younger generation- perhaps it is more of a societal detriment than a source of income.