Recent changes to the reporting of the sale of the family home will single out female entrepreneurs. For example, Mothers who choose to stay at home with their children by operating a daycare now must worry if they are the Liberal government’s latest tax target. For other families, they have been able balance work and family responsibilities by becoming a direct sellers. Some of these products include beauty care and meal preparation tools.
Over 900,000 Canadians are associated with the Direct Selling Industry (DSI). The direct selling industry accounts for more than 16 percent of non-store retail sales in Canada. 91 percent of Canadian direct sellers are women. Canada’s direct selling organizations donate nearly $8 million to charities annually. Recent statistics indicate that there are 950,000 self-employed women entrepreneurs in Canada, who annually contribute in excess of $117 billion to the economy. Their firms represent 47% of small and medium sized enterprises (SMEs) and provide jobs for 1.7 million Canadians.
For most middle class citizens, their principle residence is their main saving tool for retirement. When people work from their homes, it is usually because they cannot afford to pay rental space. When you are self-employed, any profit made is your pay cheque.
There is no magic money.
If the Capital Cost Allowance is not claimed, Canadians should not have to pay taxes on the profit from selling their homes. The rich don’t care. This has the potential of hitting the middle class who have enough difficulties trying to raise a family, financially support that family and at the same time pay off their mortgage.
As it stands, when the Conservatives were the Government of Canada, Canada Revenue Agency rules were that – provided one used less than 50% of the home for income-producing activities, and no Capital Cost Allowance (depreciation) on the property was claimed to minimize the income from income-producing activities, the principal residence designation was not affected. Canadians rightly have a nasty feeling the Liberal government – desperate to feed their out-of-control spending habits – will change this. Given the number of Canadians who are forced by circumstances to either work from home (self-employed or employees) or rent out part of their homes in order to own a home, the value locked away in the family home is too tempting a tax target for this Federal Government to ignore.