Vancouver Liberal dodges questions on principal residence tax exemption use on 40+ home sales

VANCOUVER (NEWS 1130) — The Liberal candidate for Vancouver Granville is refusing to provide details on how he treated more than 40 home sales over the last two decades when tax time came around.

This comes after NEWS 1130 reported Taleeb Noormohamed bought and sold at least 42 properties within Metro Vancouver within the last 17 years. Of those, 21 homes were bought and sold in rapid-fire style — in stark contrast to his party’s promise in this year’s federal election to bring in an anti-flipping tax.

Previously, Noormohamed told NEWS 1130 that some of his dozens of deals since 2005 are related to the fact he runs a business fixing up homes with his parents and then selling them.

Taleeb Noormohamed told me some of his 40+ home sales since 2005 are related to fact he runs business fixing up homes with his parents & then selling them. Our partners at @OMNITelevision asked him today how many he declared as principal rez for taxes — 3 times, no direct answer

— Martin MacMahon (@martinmacmahon) August 31, 2021

During a follow-up interview Tuesday, OMNI TV had a simple question: How many of those home sales did you declare as a principal residence for tax purposes?

The Liberal candidate dodged the question three times during an interview, saying only this.

“In all of my, all of my — first of all — I want to say unequivocally, I support all of the measures that the government has put forward to make sure that we can make housing affordability a priority,” Noormohamed told OMNI. “I support all those measures. I know some of the transactions I was involved with in the past, had that policy been in place today around speculation tax, that those properties, or those transactions, would have been subject to those taxes.

“And that’s perfectly fine. I support that completely, because I think it’s important for all of us to do our fair share, and I have made sure that at every turn, that I have continued to advocate for those policies, and I will keep pushing for those policies once I am elected.”

RELATED STORIES:

• Vancouver Liberal candidate flipped at least 21 homes since 2005

• Vancouver Liberal candidate makes series of rapid-fire home deals, insists he’s no speculator

‘If you claim it as a principal residence — you can get away with it tax-free’

The question of how the income from the properties was declared is a significant one. When you sell your principal residence, the gains are tax free.

You get the option to use that exemption once a year, if you live in that home. And you end up paying a whole lot more if the profit from a home sale is declared as business income or as a capital gain.

“There are three levels of classification,” explains tax lawyer Josh Schmidt. “If you’re in the business of buying and selling houses, then the income is income like any other. So, you would pay tax on it, the same as you would as your employment income, so taxed at whatever percent your tax rate is.

“If you have a house that you’ve held as a capital property, let’s say you buy a house and you’re going to rent it out to a tenant, for years and years you rent it out, and after 10 years you decide you’re done renting it, you want to buy something else, you sell the house. That house was not a flip, it wasn’t business income — it’s a capital property — so you only tax on half of the capital gain, so that’s obviously much more favourable [than declaring it as part of business income].

“Now the third category, is your principal residence. Your principal residence is a capital property to you, under the income tax rules of Canada, you’re allowed to declare one principal residence per year, that you ordinarily have to inhabit, as your principal residence for tax purposes, and pay no tax on any gain in respect to that year.

“The most salient point is if you claim it as a principal residence — you can get away with it tax free.”

When OMNI asked Noormohamed if he could tell us whether the profit from any of these deals was categorized as business income or capital gains for tax purposes, he would only say, “I have always followed the appropriate rules around this.”

NEWS 1130 has since asked Noormohamed’s staff for a breakdown of the tax treatment of each of the more than 40 home sales the candidate has been involved in since 2005. According to documents obtained by NEWS 1130, Noormohamed has made a profit of $4.9 million, $3.7 million of which he’s bagged in the last six years, not factoring in transaction costs.