The verdict in a controversial billion-dollar lawsuit between Canada’s two largest banks and the Canada Revenue Agency will have profound implications for both buyers and sellers of homes across the country. The decision, which is set to be released later this year, could dictate whether the banks have to pay more or less in taxes. Should the banks win, it could have serious consequences for homebuyers and sellers – and the housing market at large.
Potential impacts for buyers include possible shifts in real estate prices, depending on how much money the banks save from the court case. Mortgage rates could also be affected if the banks are ordered to pay more in taxes, as this could put more pressure on them to cut costs, including the interest rates they offer.
Meanwhile, homeowners could see changes to the CRA’s rules on capital gains when selling a home if the decision goes against the banks. This could mean that sellers would have to pay more taxes when they sell, as the capital gains rate could be increased.
It’s not clear yet how the verdict will affect the housing market, but those considering buying or selling a home should take the possibility into account when making their decision. It could be the difference between a smooth transaction or a difficult one.