Oz Buzz 106: Cap Gain Tax Eliminated, Yes, Or No?

April 21, 2025

Michael Campell and Ozzie talked about it on MONEYTALKS for 7 years: Why did the Liberals force us to report our principal residence sale to the CRA? We learned about UBC getting grants to analyze a wealth tax, I directed you in OZ BUZZ to the “GENERATION SQUEEZE” website and we dare you NOW to ask the question: “Will you eliminate the Capital Tax Gain exemption, yes, or no?” of ALL CANDIDATES!

Mr. Trudeau said he would not bring it in, but only after the enormous outcry when a UBC professor floated a 1% tax on any million $ house – sold or not.

NOTE: Mr. Carney has NOT said he will eliminate the tax, but this little video is a MUST VIEW for anyone that owns his or her own residence.

AGENDA

• CAP GAIN TAX ELIMINATED, YES, OR NO?
• LOSSES? WHAT TO DO NOW? STABLE PORTFOLIO?
• 3 ‘NUMBERS’ GRAPHS –
  • RUNNING TOTAL SALES DOWN 50%!
  • HIGHEST PRICE ACHIEVED
  • 5-YEAR MARCH TO MARCH COMPARISON
• ECONOMY FORECASTS
• INFLATION/ECONOMY/RECESSION
• INTEREST RATES
• QUESTIONS AND ANSWERS
• WHAT DID BUFFET AND DIMON KNOW AND WHY DIDN’T WE?
• CRYPTO LOSSES SOAR. WHO LOST THE MONEY?
• SURPRISE IN ‘RENTVESTING’

ECONOMY

A lot of comments on last month’s economy items … blame laying (on Trump/Trudeau, etc.). Reality is that in the US we have seen (in addition to the ‘drunken sailor gyrations’) the biggest S&P reversal since 2008! The uncertainty in bonds (unbelievable hourly moves) stocks, crypto, ETC. (Staggering losses: STAGGERING!) We saw copper soar, then tank and gold hit all time highs in a major surge (fear driven?). Then we watch the ECB lowers rates, BOC staying put and, in the US, they talk about rate increases while Trump contemplates firing the Chair of the Fed.

It’s not that we believe that there is uncertainty … we actually all LIVE IN IT DAILY!

Result is fear on the street. Can’t call it uncertainty, MUST call something much bigger: It is a massive INFLECTION POINT (a dramatic shift in the universe) with much speculation and really no one with any answers!

Major Point 1: We now have the 4th highest recession expectation in 25 years while 1000 analysts around the world have 1000 different opinion. By fixating our discussion only on hypothetical tariff shocks, we ignore possible deflation pressures from falling oil prices, slowing consumption, declining savings rates, and rising delinquencies. Or, oh, we could go into a new inflation because of tariffs. Take your pick … we have to wait it out!

Major Point 2: Watch unemployment rates. We expect AI to wipe out a generation of middle management. DEI and ESG departments are shutting. Governments increasing employment by 40% and tax department by 50% is over as we did in last five years! It will be forced to cut down hiring. Outcome? Watch the unemployment rate. Interest rates will follow.

“We are surfing in this unknown Hurricane … where it lands … we don’t know.”

QUESTIONS

Q: I KNOW PEOPLE THAT MADE MILLIONS IN BITCOIN. YOU ARE SIMPLY WRONG! BITCOIN WILL MAKE ME A LOT OF MONEY.
A: Anyone who is a believer in anything has my full admiration. At least you believe! HOWEVER will you be there at the end? Or liquidated? Gary Shilling (1986) warned investors that “Markets can remain irrational a lot longer than you and I can remain solvent.” Change the world ‘markets’ to ‘crypto’.

Note: JUST AS AN EXAMPLE: A Bizarre $5.4B Loss Has Left Investors Devastated:

Mantra blamed the 90% crash to 70 cents on forced liquidations on crypto exchanges, while blockchain sleuth Spot On Chain pointed to a significant movement of coins to crypto exchange OKX three days before the crash. Meanwhile, OKX’s CEO Star Xu called the OM token collapse a major scandal for the entire crypto industry, stressing that all on-chain data is publicly available for scrutiny across major exchanges.

Major Point: Did you hear anything about this in Main Street media? Nope, but someone is losing billions in this wild, crazy, fraudulent crypto world daily and massively.

Q: YOU KEEP TALKING BITCOIN DOWN. WHAT ABOUT ETHEREUM AND XRP, DOGE ETC.?
A: Not talking anything down but worrying about all the outlandish losses of money that is not available for real estate purchases! 

BITCOIN, ETHEREUM, XRP Some notable stuff;
Bitcoin (ATH): $109,026.02 (Jan 2025)
Current Price: $86,025.80 (was $82,300 week before)
Decline from ATH: Approximately 21%​
Ethereum (ATH): $4,721.07
Current Price: $1,625.56 (was 1,451 week before)
Decline from ATH: Approximately 66%
XRP (ATH): $3.84 
Current Price: $2.07 (was 1.81 the week before)
Decline from ATH: Approximately 46%​

Major Point 1: These figures highlight the volatility inherent in the cryptocurrency market, with significant price  fluctuations occurring over relatively short periods.​ Remember: Timing is everything for the big boys: They make/lose millions in an hour. YOU and I are not a big boys!

Major Point 2: As of Easter, Bitcoin is breaking out over $86,000. Watch out for whales and low trading volume. BTW, Ethereum , XRP and others have crashed to such an extent that any increase in value looks exciting. It isn’t!

Q: YOU KEEP MISQUOTING BUFFET. HE IS THE MOST BELOVED AND BELIEVABLE STOCK ADVISOR IN THE WORLD. WHAT GIVES?
A: He is not an advisor nor do I misquote him! He advises you to do what he does not! In the very good Kobeissi Letter, Mr. Buffet is quoted as saying: “Some people should not own stocks at all because they get too upset with price fluctuations. If you’re going to do dumb things because a stock goes down, you shouldn’t own a stock at all.”  Never listen to what people SAY. Watch what they DO!

OZZIE QUOTED BUFFET CASH HOARDING ($335 BILLION) for several months. Read my Ozbuzz 99 issue of Sept 2024 and every Ozbuzz issue thereafter: QUOTE: “Warren Buffet’s ‘Mr. Buy and Hold forever’ – moved into some $277 billion in cash. Now we find that Micheal Burry sold half of his holdings…”

Also: The Kobeissi’ tweeted: 

• On February 20, JP Morgan CEO Jamie Dimon sold $234 million worth of JPM stock.
• On February 22, Warren Buffett disclosed a record $334 BILLION in cash.
• 30 trading days later, the Nasdaq 100 crashed -24%. How did they know?

Since then, EVERY ‘Magnificent 7’ stock is down at least -25% from its ATH. Nvidia, NVDA, once the largest company, has erased -40% of its value and hedge funds have begun selling aggressively. On one Thursday, hedge funds sold $40 BILLION of stock, the largest sale since 2010.

AGAIN AND AGAIN: Don’t listen to what they say but watch what they DO!!!!

INTEREST RATES

With the US and CANADA 10-year bonds gyrating madly and long-term rates tied to 5–10-year bond rates, you have a decision to make. Crazy part, bonds are rising but yields are falling. Impossible predictions. Even our BOC says ‘forecasts are useless’.

US rates stay likely even and could go higher (tariffs are inflationary), Canada rates stayed even by BOC, but TD bank and others project a further .5% decline to 2.25% by yearend.

You now can get a 3.8% – 3.99% 5-year fixed rate, that is a historically GOOD rate. The decision? Go long and sleep. Or go short term variable and gamble. Your call.

FURTHER COMMENTS: 

We have 5 to 1 responses/questions/comments to crypto versus real estate. That proves to me (anecdotally) that a lot more people are in wild speculation. Ok, no more crypto, back to real estate issues.

Q: WHY NOT TALK ABOUT THE ELECTION ISSUES MORE?
A: Look at top item and watch the video. Watch it! No platforms released, but in as much as we believe our oil price affects our currency, thus inflation of hard assets, this is 
CARNEY’ ON PIPELINE: Read article.

Q: ARE YOU ON TIKTOK?
A: Not much there, but here goes: 77ozzie1

Q: I LIKE YOUR SHORTS. ARE THEY ON OZBUZZ.CA?
A: It’s funny, I wrote to someone, that I am going into ‘shorts’. Her answer: Yes, its summertime, me too! I’m on youtube.com/@ozziejurockvideo/shorts. Or just jurockvideo – scroll to shorts. Like and subscribe ( I’ll send the latest missives directly to you.)

Q: I LIKED YOUR TAKE ON THE WEALTH EFFECT, OR THE WEALTH LOSSES. WHAT REAL ESTATE TO KEEP AND WHAT TO SELL? 
A: This is not a recommendation but rather a discussion on probabilities. No one knows what people in general will do but we can look at what they did in the past. 
If YOU lose a lot of money in a speculation, you often MUST sell good stuff (gold, houses, stocks) that you might otherwise have kept forever. Real estate investors also must reevaluate their portfolios to maintain liquidity and mitigate losses. While big funds, dark pools etc. have lost millions in stock markets, retail investors have been slaughtered. The funds (big boys) have algorithms that are selling or buying on a dime, while you and I are still twiddling our ‘losing’ thumbs. That’s how the DOW and S&P can go up and down 500 points at 12:30 or 3 times in a morning. Retail investors get killed. See below on what one could do:

Q: I HAVE A LARGE STABLE REAL ESTATE INVESTMENT PORTFOLIO IN CANADA AND THE US. WHAT TO SELL? OR KEEP ALL AND RIDE IT OUT?
A: I don’t know how you rate the extent to which you have your total investment distributed etc. If anything NEEDS to be sold, the nonessential real estate will be sold first: Recreational, vacant land, building lots, all holding property that don’t cashflow etc. And you are right, real estate, typically is considered a stable asset, but is not immune to shifts and TIMING (OZZIE’s No. 2 principle). Sit back, take pen and paper and evaluate:

REAL ESTATE PORTFOLIO ASSESSMENT ACTION PLAN  (ANAYZE FIRST THEN ACT)

• If caught in a prolonged financial downturn get out of high-risk or underperforming real estate assets.
• Get out of leveraged properties.
• Explore sale with leasebacks to maintain liquidity.
• Explore private real estate capital for diversification and potential tax benefits.​
• Finally: Investigate underperformance, high risk, high debt, high maintenance, volatile markets, leasebacks, tax benefits/pain of sales.

Your aim is to preserve capital, maintain income streams, and position your portfolio for recovery when markets stabilize.

Sell properties that are:

1. Underperforming RE not generating expected rental income or experiencing high vacancy rates.

2. High Maintenance: Properties requiring significant upkeep or renovations, which can be costly during economic downturns.

3. Volatile Markets: Real estate in areas with declining property values or economic instability.​ Sell these assets to free up capital to cover losses elsewhere or to reinvest in more stable opportunities.​ But, remember, you know all your properties, pimples and all.

4. Lots of debt properties (high leverage) can kill you if rental incomes decline or interest rates rise. Selling these assets can reduce financial strain and prevent potential defaults.​ If not too late already (you can’t sell).

5. Analyze strategies with your professional. If you do not want anybody to know you own troubled assets, sell your income properties but lease them back from the buyer. This gets you  immediate capital to keep afloat while allowing continued use of the property, looking good and covering operating costs.

6. If all fails, there is private money. Currently, there is a ton of private capital looking for highly secure real estate assets. Interest rates may be higher than conventional, but beggars….etc.

Q: YOUR CALLS ARE ALWAYS ASTOUNDING. YOU CHANGED YOUR LONG-TIME STANCE ON US DOLLAR BECOMING A RESERVE CURRENCY LAST MONTH AND THE US DOLLAR WENT DOWN HARD? NOW WHAT?
A: I still believe US dollar will regain to be the reserve currency of the world. But UNCERTAINTY on world debt, Trump’s unpredictability, fight with FED Chair – and tariff talk all that has overseas investors spooked and has them take some of their money back to (their) home. Watch the US bond market. As last month: Investor money leaving? If it continues, dollar range bound as in (much?) lower!

Q: WHY THE TARIFFS?
A: Soo many questions. Just note: Trump has multiple objectives: Increase revenue while preaching onshoring. (he claims it to be aiming for a non-political base on reciprocity and a fairer trading system worldwide. The goal? You have a universal tariff across the board.

How to  get there: 

1. Read his books. It’s not one round of negotiation it is MULTIPLE ROUNDS.
2. He uses sector-specific surcharges and country-specific duties, often involving multiple rounds of negotiation.
3. Immediate result? Distortion in his own and everyone else’s economy.
4. His goal: Lower dollar, lower taxes, cut regulations, border.
5. It takes time…1 – 4 months. And it will be over. In the meantime tariff talk rules the ‘news’ roost.

Q: IN A RECENT SPEECH YOU TALKED ABOUT RENTVEST. RENT YOUR OWN LUXURY HOUSE, INVEST YOUR CASH IN CASHFLOW JURISDICTIONS LIKE EDMONTON, FLORIDA, OR?
A: It is not a new concept for luxury buyers. Example:

Last week I talked to a friend who lives in a 5 million luxury property. His taxes are $33,000 per year and common area costs are $3,500 a month (likely  going higher).
That’s 5 million invested in and $75,000 a year (rising) ever year.

If he rented the place at $9,000 a month or $108,000 a year and bought cash flow properties elsewhere, this is what it could possibly look like:

Buy 25 x 1-bedroom new condos in Edmonton at $200,000 each (or Florida/elsewhere). They rent at about $2,000 per month.

You buy 25 of them with cash – gross income $50,000 a month. Allow for 8% professional management and 7% extra costs (tax and strata). Net $42,500 times 12 = $510,000 

Work out the difference to now: You pay now $75,000 tax/fees, rent would be $108,000 — $33,000 more in rent payments.

$510,000 income minus $33000 – net income $477,000.

You live in a fine luxury home, no worries about tax and strata increases and pocket close to $40,000 a month. 

Ok, ok, use your pencil and make your own addition to prop taxes and strata fees. 

Or let’s say you had $2 million down payment and took out a $3 million mortgage – now add your monthly payments of $17,400 per month or $208,800 per year!

But I just wanted to demonstrate the point: Here is a fine story on the concept for younger people: howtomoney.com/rentvesting/ or watch my now dated but still valid video “Live your money” youtube.com/watch?v=VGsFRHfrues

SUMMARY OUTLOOK

Revisit last month. Same comments. Next month we will have the election in Canada done.

2. ALL-TIME HIGHS ACHIEVED: (Comparing different months is only meaningful if you want to know ABSOLUTE HIGHS)

HIGHEST PAST MONTHLY PRICE AND SALES COMPARED TO MARCH 2025. 

3. VANCOUVER SF AND CONDOS

Sales and Prices of MARCH over last MARCH. Down sharply from June 2024. Well below the 10-year average.

VANCOUVER: Here is a 5-year month of MARCH 2025 over the month of MARCH 2024/2023/2022/2021 comparison.

Major Point:
V  Condo – New Listings were up 26% y-o-y  in MARCH! Active Listings up 30%

FRASER VALLEY: Here is a 5-year MARCH 2025 over MARCH 2024/2023/2022/2021 comparison.

Major Point: FV – SF Active listings, up 35% in MARCH
FV – Condo Active Listings up 52% in MARCH

What about pre-sales? The Vancouver and Valley market have seen a marked declines in existing sales and bringing new buildings to market. 

Pete Ryznar from Ryznar Media makes a good point about why Vancouver is not Toronto:

“We don’t anticipate that the market downturn in Vancouver will be as severe as Toronto’s, primarily because our market has a more diverse range of product types. Toronto’s inventory is predominantly concrete high-rise developments, whereas Vancouver offers a broader mix, including more wood-frame projects specifically targeting end-users.”

He also point to insights from Rennie, the composition of buyers in Vancouver has shifted significantly – from approximately 50% end-users and 50% investors previously, to now about 75% end-users and only 25% investors.

Major Point: As last month: Keep making your low-ball offers … this is the best time to get your new digs (ready in 3-4 years). Hot deals will stop eventually.

MAJOR, MAJOR POINT: As always, we say that there is no best deal market, there are only best deals that you negotiate! And in 2025 you CAN negotiate.  

(You’ll get Oz Buzz 2 weeks before it’s posted online)