Playing to Win - 066 - Multiple Passports & New Taxes Threaten Homeowners

00:00:00.000 all right and we are live what is up my brothers plane to win episode number 66

00:00:08.100 and my guest who is in a totally different time zone i think last time we talked he was in poland

00:00:14.300 is not here but i always start the show when the show is due to start so i'm hoping that he

00:00:20.540 gets my email and uh gets his clock set and hops in soon um i'm going to cover some of the stuff

00:00:27.700 that he sent me because we talked a couple weeks ago about uh these new proposed taxes that are

00:00:34.080 going to be threatening homeowners and it's starting of course uh in my home country of

00:00:39.700 canada but i've seen discussions like this in other countries around the world so um before we get

00:00:47.160 started though uh do me some solids hit the uh the thumbs up the like button just helps out with the

00:00:52.780 algorithms very kind of you to participate and um i wanted to just recap real quick uh because i

00:01:00.580 pinned it in the live chat there um my school of entrepreneurship is currently open for enrollment

00:01:08.020 um i opened it up earlier this week the enrollment period closes on uh friday sorry not friday uh saturday

00:01:17.220 on the 30th and uh we'll start doing the deliverables and the zoom calls and uh answer

00:01:22.840 people's questions that go through the material so essentially what this is and again the link is

00:01:27.580 pinned in live chat if you're watching the replay i'll put it in the description and pinned in the

00:01:31.080 top comment as well but i've had a lot of people request over the years rich put out more content on

00:01:37.280 entrepreneurship how do i start a business i'm tired of working a job j-o-b by the way is an acronym

00:01:43.840 for just over broke and they hit their heads up against a glass ceiling and they're looking to

00:01:47.440 make more of themselves they want to start a business that's really the only way that you

00:01:50.320 can do it in today's world and environment and the other side of the coin is the guys that are

00:01:55.700 currently running something but it's not profitable for them it's not making them proper money it's a

00:02:00.600 headache they have hr issues they've structured the business in such a way that it's a nightmare for

00:02:04.920 them all the information i've put in these lectures there's about four and a half hours of them

00:02:09.620 and if you guys click the link it'll bring you through here with the landing page and

00:02:13.580 tell you a little bit about my past a lot of the stuff that i've done but down over here you'll

00:02:18.740 see the course curriculum i deal with everything that you need to know when it comes to having the

00:02:24.060 correct mindset around screwing your head on properly so that you start a business that is

00:02:29.060 going to serve you and make you money and be fun and profitable and ideally if you structure it right

00:02:34.980 location independent and it gets you away from all the nightmares that most people get themselves in

00:02:40.660 what most people don't understand is that the vast majority of people that are starting businesses

00:02:45.660 up never crack more than a million dollars a year in annual sales and they generally build something

00:02:51.300 that is quite frustrating and annoying and unprofitable for them to run they generally

00:02:55.600 self-employ themselves right like they create a business that employs themselves

00:02:59.300 and all they do is they move from a job over to something where they're essentially an employee of their

00:03:05.300 own business only with more risk exposure to legal issues hr tax liabilities uh government regulations

00:03:12.260 and all that sort of stuff so i've put this out there it's open for enrollment right now you can go

00:03:17.120 check it out um everything's there on the landing page the enrollment period closes again in two days

00:03:23.100 on the 30th so if it's uh something that you're interested in go have a look and uh if there's

00:03:29.240 any questions i'll i'll deal with them live in the the chat as we're doing the show um let me throw up the

00:03:35.240 um post here that i got from david let me check my email see if he's gotten back to me because

00:03:42.140 he was messaging me this morning about yeah let's do it i'm excited time zone issues man

00:03:47.600 time zone issues tend to cause problems from time to time here it is uh so if you're not familiar

00:03:54.620 i did a cast with him about i don't know 30 episodes back or so if i got the number right

00:04:03.020 and um david is a uh well he's a trained lawyer he doesn't practice law anymore but that was his

00:04:10.440 background and in the last cast we talked a lot about the importance of having multiple passports

00:04:15.380 being able to maneuver you know and move from country to country one of the things that he made

00:04:19.700 very clear during the last cast is that um you don't actually own your passport so i mean look

00:04:26.900 we've seen what happened in the last year a couple years anyway with the beer bug and the overreach

00:04:33.180 of power and control from government it's it still exists today in canada i mean i'm a pureblood so i

00:04:39.140 can't travel outside of the country still on federal airlines um i could drive across the border so

00:04:45.300 i'm going to be dealing with that a little bit but um yeah like they have the right to say you know

00:04:51.620 what sir uh mr cooper we're going to take away your passport because we don't for whatever reason

00:04:56.200 they don't even have to tell you probably um and you're not able to fly you know without a passport so

00:05:02.300 one of the arguments that david made the last time we're talking and he used kind of like a high value

00:05:07.480 client as an example i think he said he had a um uh kuwaiti uh client of his that was um trying to

00:05:17.300 get funds um or travel it was it was tied into uh finance and it was a large sum of money that was

00:05:24.680 tied up and because the government in the country that he had resided in um put a limitation on travel

00:05:32.900 and movement of funds um he put himself in a pretty precarious predicament where he had pretty

00:05:39.180 much like 95 of his cash locked up um so he made the argument in that last cast you guys can go back

00:05:45.380 and watch that i wanted to talk to david a little bit more hopefully he'll still show up um if he gets

00:05:50.660 the email and uh hops in but the thing that i wanted to hit on with this one is this uh publication

00:05:58.560 that he put out on his website at les brons and associates the title is principal residence capital

00:06:03.940 gains exemption under threat in canada so if you're not familiar in most places in the world still

00:06:09.960 um you can buy a house live in it when you sell it whatever capital gains that you make off it are

00:06:17.000 completely tax-free it's i think probably one of the last tax-free havens with the exception of

00:06:24.100 uh a tfsa which stands for tax-free savings account here in canada which doesn't allow you to set aside

00:06:31.280 much i think it's maximum about 80 90 000 uh to this um at the time of this recording right now but

00:06:37.500 they add an extra like five grand a year to it sort of thing um there's no real tax-free savings

00:06:42.980 vessels and for the most part most people that retire here in canada aren't retiring

00:06:48.220 on um their pensions or any uh retirement savings plans that they've set aside it's generally the

00:06:55.840 value the appreciated value in their home and uh he uses an example in here which i think is

00:07:02.640 fairly accurate so i'm just going to kind of go through this and i'll read it out to you

00:07:06.340 um at present sorry at present your primary residence may secure you a comfortable retirement

00:07:12.320 for canadian taxpayers and again this is not limited to canada i mean if you listen closely

00:07:17.080 to what your legislators and policymakers talk about in parliament when it comes to raising tax revenue

00:07:23.720 or creating tax revenue for the country if you've been asleep the last couple years uh let me remind

00:07:30.140 you that the money supply in the united states has doubled in the course of two years over its entire

00:07:36.960 lifetime okay so they've printed more money than any other time in history for mon for for stimulus to

00:07:43.840 send out checks to uh people you know when they took away their jobs and shut down businesses and

00:07:48.980 they had to give the money to pay uh rent um there was a lot a ton of money that was printed in the last

00:07:54.980 couple years and you can't print money and create debt without paying for it and they generally pay

00:08:00.880 um for you know revenue that needs to generate to spend on you know keeping people home as an example

00:08:08.480 like the beer bug if there's a pandemic i use that term loosely obviously um or if they have to uh

00:08:16.400 you know stimulate the economy economy with infrastructure and stuff like that so they have

00:08:21.760 to create tax revenue and one of the best places they haven't tapped into yet that would generate a

00:08:26.740 ton of tax revenue for them is taxing capital gains on a principal residence which they don't do

00:08:33.000 right now anyway so let me read this to you again um can you attack payers the primary residence is

00:08:38.220 their single largest asset with recent price explosions it is now an asset with a large amount

00:08:43.040 of unrealized capital gains appreciation as of 2022 the average canadian household net worth is

00:08:48.400 nearing 1 million of the capital gains from any potential sale for the canadian government the

00:08:53.260 inability to tax principal resident gains therefore it means millions of lost potential tax revenue

00:08:58.660 they already tax us everywhere everywhere you know you buy gas you pay yourself you take an income

00:09:06.300 from an employer um you buy any goods or service you're paying taxes on it you're paying taxes um

00:09:12.660 when you invest money outside of your retirement savings everything you do they bend you over and they

00:09:19.080 tax you with the exception of your principal residence which values by the way have exploded over the last

00:09:25.160 few years in canada uh to give you an example um i bought my house this one here um 2011 or so so

00:09:35.200 around 10 years now and it's more than doubled in value i'd probably say yeah it's it's definitely more

00:09:43.380 than doubled in value um which is a rate of return that you're not going to get anywhere else with the

00:09:48.940 exception of um if you're an early adopter of something like bitcoin you know for example uh in upcoming

00:09:54.860 budget proposals the canadian government will be looking for ways to make up for the financial

00:09:58.620 deficits that they have experienced over the past few years largely coming from the covet 19 pandemic

00:10:03.480 one way they could potentially propose to help ease this debt is to fully or partially void

00:10:08.700 prcge i'm assuming stands for principal residence capital gains exemption okay um the only reason that

00:10:18.320 the prcge has not already been attacked is a fear of voter reaction however that and you know by the

00:10:24.700 the way the the the federal government currently has a majority uh stake in voting rights right now

00:10:33.160 in canadian parliament because they've partnered with the socialist part of the ndp so trudeau's liberals

00:10:37.940 partnered with the socialist party to basically push any legislation through um and of course you know

00:10:43.640 the socialist party's entire mantra is tax the rich and they're going to say what they'll what

00:10:49.060 they'll probably do if i were to um take a a guess at this so they don't lose the confidence and the

00:10:56.900 votes of the um less wealthy canadian voters is they'll probably draw a line in the sand somewhere

00:11:04.440 where they feel like it's only the wealthy that'll be affected or mostly affected or they'll have some

00:11:09.380 sliding scale system where if the house is worth over two or three million then you pay 50 percent if

00:11:14.300 it's under two million then it's 25 if it's under a million then it's 12 or something like that

00:11:18.440 that's what i suspect they would do to sort of hold their position but either way like you tax a million 0.97

00:11:25.180 dollars at 12 that's 120 000 that's not chump change there's a fucking shit ton of cash for most

00:11:30.980 people that they should have in their pockets not stolen from them anyway the only reason why um this 0.75

00:11:36.440 has not already been attacked is fear of voter reaction however uh demographics are changing this

00:11:41.340 calculation many younger voters are currently not able to get into the housing market due to the

00:11:44.960 recent extreme rise in housing prices they have very little sympathy uh for those that would have

00:11:50.560 to pay taxes on the astronomic price increase of their home limiting or eliminating the uh principal

00:11:55.880 residence capital gains exemption also affects fewer voters on day-to-day basis in contrast raising the

00:12:01.940 hst by the way is the harmonious sales tax which is 13 whenever you buy anything if you buy a what they

00:12:08.920 quote is a luxury vehicle now in canada by the way uh which could mean i don't know you have a horse

00:12:15.100 farmer you're a contractor you need a diesel dually or something like that that might cost you 120 150

00:12:20.300 grand depending on how you spec it that's now considered a luxury vehicle anything you buy over

00:12:25.320 hundred thousand dollars in canada now is now subject to a much higher tax rate um after 100 grand

00:12:31.480 so there's a lot of guys actually in the last um year before that um lock sorry before that became

00:12:38.960 law january 1st this year that were rushing to make sure they got their um vehicles purchased and any

00:12:45.480 you know expensive uh toys if you will anyway um what would that mean if the principal residence capital

00:12:52.860 game exemption was eliminated so canadian homeowners could be paying up to 50 percent combined federal and

00:12:59.200 provincial rates on their capital gains from the sale of the primary residence for example let's

00:13:03.860 say a home was purchased for 100 grand 20 years ago which is completely like average price for most

00:13:09.680 people even in toronto would have been paying 100 grand for a detached family residence with a white 0.62

00:13:16.780 picket fence that's all you really needed probably somewhere between 100 and 150 000 i remember my parents

00:13:23.400 bought a house um and a suburb when i was in grade 8 for 220 000 and that was considered a mansion at the

00:13:32.980 time it was like considered expensive um those houses are now worth easily three to three and a half million

00:13:40.700 dollars um in that neighborhood um so that's how much residential home prices have moved um here anyway

00:13:49.420 i know in a lot of parts of the world they're moving a lot as well but you get the idea anyway

00:13:54.040 today that home sells for 1.1 million this results in 1 million dollars in capital gains with the

00:14:00.140 principal residence capital gains exemption the homeowner will net 1.1 million for their retirement

00:14:05.520 uh the sorry if the principal residence capital gains exemption was eliminated this would cut their

00:14:11.640 net proceeds to 600 000 canadians can find out i guess there's a calculator here that he's inserted

00:14:17.080 um will principal residence capital gains exemption under threat is it time to take action so

00:14:22.580 let's see what his advice is here because he's got three um i love his um i love the way that he breaks

00:14:28.680 down these um options um he's a very dude dave where are you man let me check my emails again

00:14:35.260 um is he coming or what because he's so eloquent in the way that he breaks these down

00:14:40.380 now okay let's throw this back up so um with prison with principal residence let me just move

00:14:48.980 this over a little bit try to make it a tiny bit bigger and let's fill it up here boom oh i should

00:14:56.300 be able to see it better okay uh is it time to take action skeptics may think that imminent

00:15:01.900 elimination of the principal residence capital gains exemption is unlikely given the inevitable

00:15:05.820 uproar from older voters i would agree uh nevertheless even if one puts the odds at this

00:15:10.660 outcome at 25 prudence would dictate that an outcome worth preparing to avoid especially if

00:15:16.300 a strategy avoids the impact of eliminating the principal residence capital gains exemption

00:15:20.180 25 still quarter million dollars in previous blog posts i describe reacting to potential financial

00:15:27.400 and other threats to your family wealth and well-being in the same way that you would act if

00:15:32.560 living in a wildfire zone namely that you would engage in fire prevention acquire fire insurance

00:15:38.920 and map out a fire escape plan in case you perceive the threat to be imminent leaving yourself unprepared

00:15:45.500 in a situation like this may lead to detrimental financial repercussions acting preemptively before the

00:15:51.660 fire reaches you will save your fiscal house from suffering so let's see what his advice is here

00:15:56.240 uh so this is a strategy uh he's got three steps here he's got fire prevention

00:16:01.520 we've got this giant ass uh looks like field fires and illustration so fire prevention in this 0.97

00:16:09.620 situation fire prevention will simply mean selling your primary residence sooner rather than later

00:16:14.180 because of the current state of the canadian housing market you'll net a significant sum for retirement

00:16:19.360 those proceeds can then be applied to renting in canada alternatively you might institute a fire escape plan

00:16:25.780 and retire abroad to avoid other inevitable canadian taxes in the chat guys if you live in a country

00:16:32.260 somewhere where they're starting to talk about this stuff as well let me know i'm i'm i'm really curious

00:16:38.040 uh step two is fire insurance fire insurance is having a second citizenship oh here we go

00:16:44.140 dave you're here sorry i had a little uh ukrainian crisis was it a time zone thing or

00:16:51.260 uh no no i had a client who's uh just escaped from uh from the ukraine that i

00:16:58.120 so i started to go through your um uh let me why isn't it added to screen here

00:17:05.720 there we go i started to go through your blog article and i got to um fire prevention and fire

00:17:12.620 insurance as remedies to this problem so we've already talked about the problem

00:17:16.520 um why it exists and why they're trying to implement it um maybe i'll let you take over

00:17:23.040 since you're the expert and you wanted to cover this topic and you wrote the blog anyway but

00:17:27.100 um so step two as far as a remedy with fire insurance can you explain that to the viewers

00:17:32.820 sure so depending on what jurisdiction we're talking about so if we're in canada you simply need to become

00:17:40.680 a non-resident which means that you need to be able to live somewhere else if you're in the in the

00:17:46.140 u.s you need to because they have citizenship based taxation you need to have another citizenship

00:17:51.600 in place um which you may have because you moved to the united states and naturalized so you have

00:17:57.440 the citizenship of your birth or you may have the citizenship because you had a foreign parent

00:18:02.620 or you may have moved to another country and become naturalized there or a lineage or a citizenship

00:18:09.440 by investment so you need to have another citizenship in order to give up your american

00:18:13.360 um australia for example is becoming non-resident in australia is a bit more of a sticky wicket than

00:18:21.180 for example canada in that you it's best that you move to a tax treaty jurisdiction so buying a

00:18:28.580 citizenship in a place which doesn't have a tax treaty with australia isn't particularly helpful

00:18:34.260 if you clearly want to leave there so you have to look at what are the rules in order to

00:18:40.320 escape the fire of your current taxing jurisdiction and do i need simply another residence do i need

00:18:48.580 residents in a jurisdiction with a tax treaty or do i need another citizenship also are you suggesting

00:18:55.960 that you can retain that residence in canada but um abandon your citizenship and not pay the capital

00:19:03.960 gains tax if you're not a citizen no so canada tax is based on residence if you sojourn spend 183 days

00:19:12.580 in canada or if you have centralized your mode of living in canada so giving up your canadian so if

00:19:19.820 you're a permanent resident or work permit holder or even a visitor who spends too much time in canada

00:19:25.900 you're going to become tax resident so in order to cease to become tax resident you need to to move

00:19:33.620 and you need to get rid of certain ties in canada okay so you should so then you have to dispense of

00:19:39.140 the asset you have to sell the house correct so so when you leave canada it's as if you die to the

00:19:47.000 canadian tax system so it's a deemed disposition for capital gains purposes and the the point i was making

00:19:53.880 in a in the blog was right now a lot of canadians have a lot of their wealth in their principal

00:20:01.960 residence of course they have an exemption from capital gains on that which they would also have

00:20:06.420 when they became non-resident they may also have small business exemptions etc but what happens if in

00:20:13.660 the future they limit or they completely get rid of the capital gains exemption on principal residence

00:20:21.220 and you can say well that would be political suicide and sure if your voters were only boomers

00:20:28.440 but if you have jen if you have millennials who say the housing market is is way out i can't afford to

00:20:37.660 even rent hardly own but i can vote so i don't really care that you know the the boomers have to 0.99

00:20:47.140 pay capital gain on this house that they bought for a hundred thousand which is now worth two million

00:20:51.980 got it um i was speculating on this earlier before you came on but are there other other countries that

00:21:00.200 are currently talking about taxing capital gains at the rate that trudeau is in canada

00:21:05.500 it's there is a a push and a pull countries tend to try to tax what i call their native golden geese

00:21:18.620 so canadian canadian government tries to tax canadians who are born raised here and who have life

00:21:26.740 inertia in canada much more than they try to try to tax foreigners who they are trying to attract

00:21:33.660 to their shores and this is true in a lot of jurisdictions so you can abuse your golden your

00:21:40.720 native golden geese because they're much less they'll take a lot more abuse before they'll fly

00:21:45.740 away whereas if you want to attract the foreign golden geese you have to make it more attractive

00:21:51.500 than the jurisdiction that they're in so far so if we look at for example all the controversy that's

00:21:57.200 going on right now in the uk that theory with regards to the chancellor the exchequer which would

00:22:03.720 be the equivalent in canada of the finance minister um his wife is something called a non-dom well the 1.00

00:22:11.500 uk is why do all these russians and greeks and saudis and wealthy indians live in in the uk well because

00:22:19.420 they only get taxed on uk source income if they're not from there so they have a regime which has been

00:22:26.040 around for a century and a half to attract wealthy foreigners that's why they're all there well now 1.00

00:22:32.660 the it looks like you know there's a great chance that that system may may be thrown kind of under the

00:22:40.700 bus um and one of the problems is that if it does um you know where do these people go to next

00:22:49.840 got it okay get a backup plan get fire insurance and get a you know a a fire escape plan so let's

00:22:58.720 talk about the fire escape plan because it's step three in your article and by the way for those of

00:23:02.360 you guys watching um i dropped david's um article in the live chat so you can find it and read it there

00:23:08.400 later if you want right so a fire escape plan is depending on your jurisdiction it'll show what's

00:23:16.040 involved so if we look at canada it's preparing for that deemed disposition so one of the things i

00:23:24.240 speculated i i thought people should think about is if you are worried that in the future you're going

00:23:31.100 to have to pay capital gains some or all capital gains in your principal residence maybe you should

00:23:38.780 think about selling that now while you have that exemption so that you know your sales price gross

00:23:45.520 equals net as opposed to having you know only the net proceeds after capital gains you can then either

00:23:52.620 decide i'm going to move now or you can say i'm going to start renting or i'm going to put things into

00:23:59.240 capital gain much more efficient capital gain um vehicles so i'm going to put it into shares which are

00:24:07.120 going to grow as opposed to paying dividends um so that it's a fire escape plan is let's look at your

00:24:14.240 asset by asset how that's going to be impacted by the departure tax in canada as we call it also

00:24:22.540 what do i do um in kind of uh i'm just gonna um

00:24:30.460 what am i going to do with regards to lifestyle things so this is the point where you start to

00:24:39.560 kind of declutter your life okay one of the big things that canadians always go on about is oh we

00:24:45.480 have free health care you don't have free health care you pay a premium every april 30th for that

00:24:49.680 thank you very much and health care is a commodity that you can go and buy in the marketplace

00:24:54.040 and when you compare the the premium for that health care so for example i live in poland

00:25:02.260 um the top income tax rate in poland and there's no kind of provincial uh um version is 19 percent

00:25:12.420 and they're dropping that down they're looking at dropping that down to six percent

00:25:16.960 why poland also has a 23 percent vat tax but if i don't spend that money i don't pay the vat they

00:25:25.960 also have very high excise taxes on everything from alcohol to certain commodities etc so i've

00:25:33.740 organized my life so that i don't pay a lot of vat and i've organized my life so i don't have a lot

00:25:40.540 of taxable income that's even subject to the 19 percent for that there is the equivalent of kind

00:25:47.920 of national health care service or canadian medicare whatever we want to call it canadian

00:25:53.300 canadian version in addition there's also private health care coverage which is not only kind of

00:26:02.280 pretty good it's actually world class because they also have a large medical tourism industry here

00:26:07.420 so uh i had twins those are high risk uh births and in the the specialist ob-gyne that we had

00:26:15.840 sitting in there were russians saudis americans brits because they would all come to this top

00:26:22.120 clinician and clinic so for my family just to give you so there's myself my wife and two eight-year-old

00:26:29.960 twins and we pay in so we have a gold-plated medical um coverage and so that's 800 zloty a month

00:26:43.880 divide by four for the u.s dollar so for 200 bucks that includes dental cosmetic surgery

00:26:51.260 everything so you're covered from head to toe head to toe four people in our family 200 u.s

00:26:59.040 got it so compare that to what you sent to revenue canada last april yeah yeah it's it's very

00:27:05.960 expensive and it's a shitty system i mean i i have an email on my list that talks about how

00:27:10.640 they really messed up uh the beer bug treatment with a completely unnecessary and toxic drug called

00:27:17.540 remdesivir so if you're on my email list you can read about that there if you want to know how to get

00:27:21.680 on my email list it's it's pinned in the top of all my videos you can find it um so okay so

00:27:29.040 how far off is this new law from we're sorry how far off you know is this new bill from becoming

00:27:36.480 law and getting royal assent like is this something that they're starting to vote on is this something

00:27:41.600 that they're building like what do we like do i have two years to sell my house or six months

00:27:46.360 well the first so this is the thin edge of the wedge so what what uh christian freeland has

00:27:52.880 proposed in the last budget oh this is freeland's idea is it yes so um so christian freeland put in

00:27:59.940 into the last budget the first kind of time that this whole long sacred principal residence exemption

00:28:09.740 and said well now we're going to put a restriction because we want to avoid the flippers

00:28:14.580 so you have to in order to get the principal residence exemption have held onto the property

00:28:22.240 for at least a year otherwise we'll consider that trading otherwise that's considered ordinary

00:28:28.260 income rates well that's quite a quite a change so if your business is by renovate and flip you've

00:28:38.600 been enjoying if you've been doing a principal residence principal residence you've done quite well

00:28:43.440 that's being attacked now that you know the camel's got its nose in the tent my question is how long

00:28:50.860 before you have the whole camel in the tent which is okay well the next we need more money again so

00:28:56.140 we've already done that okay so let's let's go after this a bit more we've done some polling

00:29:01.560 and you know the the youth vote we can get by saying oh these prices have gone through the roof

00:29:09.180 you know people shouldn't get complete capital gains exemption on they should maybe get half of it

00:29:14.620 or we'll cap it as you know all these really wealthy urban urbanites we're going to cap it at

00:29:20.860 a million or five hundred thousand or two hundred thousand the problem with the definition of we're only

00:29:28.240 doing the rich is the definition of rich constantly changes depending upon the perspective of your voters

00:29:35.860 yeah i mean i talked about it before you came on but i think it's going to be introduced as a sliding

00:29:42.180 scale because the only way they're going to push this through is was is with the support of the

00:29:45.880 ndp government which is a socialist government and they want the votes of the people that are you

00:29:50.420 know lower income earners so they're not going to apply a 50 tax rate i don't think anyway on um

00:29:56.900 you know like a value of 250 000 for example there's not many houses that would sell for that around

00:30:01.880 here anyway but i think that what they'll probably do is they'll have the highest tax rate on like

00:30:06.880 two million up maybe three million three million up and slide it down to 25 percent and maybe a million

00:30:12.100 and then under a million five hundred thousand a million it might be something like 12 percent um

00:30:16.920 but it's certainly something that they've been talking about for the last couple years that i've

00:30:20.700 heard about anyway so when you emailed me on it with the article i was i was definitely interested

00:30:24.760 immediately but um i know how long it takes for them to propose a bill get it approved go through

00:30:31.860 royal assent and then it become law so because when i did the bill 55 lobbying back in i think it

00:30:38.000 was 2011 2012 it didn't become law until 2015 so it may take a few years for this to go through but i

00:30:43.420 think the problem is going to be is once enough people realize that it's going to go through the

00:30:47.360 market's going to get flooded with home sales which is going to lower the prices correct and the other

00:30:53.020 thing that you have to remember is we now you know again i'm not in his mind but i'm thinking that

00:31:00.060 justin trudeau doesn't is not eager to go back to the polls again he thought he had a moment that i

00:31:06.840 think he's good until 2024 2025 yeah and and he didn't so um he's going to have to keep that coalition

00:31:14.880 going and they can always say you know this capital gains they're shrinking exemption yeah but it's

00:31:21.700 better than the wealth tax better than that wealth tax and so that's you know the thing that they they

00:31:28.200 they keep looking at you know oh yeah i mean we would never have thought of this before but you

00:31:33.500 know it's covid and stuff and it's better than the wealth tax and that's the way they'll sell it and

00:31:38.040 they'll also sell it as a generational thing um because you know there are young voters now who just

00:31:45.140 can't even think about getting into the market because the entry point is is so high so they

00:31:52.740 don't really you know care that you know the the the people in houses that they could never even rent

00:31:58.980 um are going to have to pay some capital gain on what they think is a a windfall let me um let me just

00:32:06.720 go to the chat here and grab some of the super chats and comments somebody mentioned black rock i don't

00:32:10.400 know if you're familiar but apparently black rock's buying up a ton of real estate in the u.s

00:32:14.420 yes um single house um residences how is that going to affect the housing market in the u.s

00:32:22.040 with uh stock what are they doing with the houses that they're buying so they're buying the houses and

00:32:27.660 turning them around as rental properties uh it's an asset class that that they're looking at because

00:32:33.000 there's a solid underpinning of an asset there so if you think back to your asset back securities it

00:32:39.680 it turns it around and it's good for for securities but they actually own the houses as opposed to

00:32:45.520 you know the the famous jinga of uh uh structured uh prior to 2008 um they are also riding the wave of

00:32:56.560 huge inflation in the rental market so you've got an asset which you can buy you can turn around you can

00:33:06.560 rent at a at a higher uh value it's got a great return on it and you can turn around and leverage

00:33:13.160 that and you've got a security which is asset back with a very steady stream of of income so that's

00:33:20.020 why i'm told also that when they're buying these single family residences that they're overbidding

00:33:25.220 on them um i've heard as much as 25 to 50 percent more than market value is that is that correct

00:33:30.840 sure they're they're absolutely driving if you look at places like florida uh the the the about

00:33:37.560 and and urban centers um and they're now starting to move into secondary markets uh i had a client of

00:33:45.000 mine whose family had built up about a 50 million dollar portfolio of uh basically residential real

00:33:53.300 estate they had a bunch of tenants and uh and things and this was the family business uh dad passed

00:33:59.080 the way his son got the business one was very good at it uh wife got sick and uh it was black rock came

00:34:06.860 in and they they offered him uh i think he said it was something like 15 times ebitda and you know so

00:34:15.580 he said sure and is it and and they also have the economy of scale of being able to deal with um you

00:34:24.480 know huge volumes of construction now what that means for the tenants of course is that you can't

00:34:30.340 call up you know mr or mrs jones who you had a personal relationship before now you've got a

00:34:35.940 number of 1-800 i want to complain to back back rock and so got it let me um let me grab some of

00:34:42.480 these super chats here uh chris just says uh grateful for the cast thank you brother uh tom says uh this

00:34:49.180 whole you will own nothing and be happy bs is happening everywhere soon everyone everywhere

00:34:54.220 will become renters that's um i think that sound by you will own nothing and be happy was uh klaus schwab

00:35:01.760 the world economic forum i'm not sure if you heard about this guy in and the wef and his connection to

00:35:07.760 several of the world leaders including uh trudeau macron and uh the australian and new zealand fellas

00:35:13.840 yeah no i didn't i didn't but i mean you owe nothing and be happy bs okay well that's what

00:35:20.600 you want to do you know well that's my friend well that's what they're trying to sell sell the world now

00:35:25.780 you know as globalists is you don't need stuff to be happy i remember about 10 or 12 years ago i was at

00:35:31.920 a mastermind conference and one of the thoughts that they were kind of like tossing around at the time

00:35:36.960 was um in the future you'll own nothing and have access to everything and that pretty much became

00:35:42.940 true like you didn't need a car you could just call uber on your app you didn't need a house you

00:35:46.960 could just do an airbnb rental right so the the theme and theory around that you know becoming

00:35:52.880 something and developing to something actually you know became true but now um this klaus schwab guy

00:35:58.540 is like turn that around and it sounds like you know blackrock is playing a part in this grabbing up

00:36:04.160 a lot of single family residences but there's a lot of people that are um that are getting frustrated

00:36:09.600 with um you know what's going on and what they're starting to see when they um you know pay attention

00:36:15.200 to some of these lyrics that these globalists start to sing um ernesto says sounds like they're

00:36:21.120 changing the rules for foreign investors and homes in canada uh how would that affect these tax exit

00:36:26.620 strategies do you have any thoughts on that david yeah well that was ernesto that was the inspiration

00:36:31.680 seeing that in that budget was the inspiration for that blog which is okay we've now seen for the first

00:36:38.520 time uh a canadian politician who has gone after and limited the principal residence exemption and so

00:36:48.320 if we think anticipate the predictable they're going to oh that didn't go that wasn't uh didn't cost us

00:36:55.840 very many points in the in the uh in the polls let's keep going after that let's keep going after that

00:37:02.260 and we'll paint it in a way that it's the the others right now the others are foreign investors driving

00:37:07.680 up your home prices soon it will be the you know the greedy boomers um who you know rode an extraordinary 0.99

00:37:16.100 increase in that particular asset class of residential real estate and you know it's one of the things

00:37:23.420 you know what you own um i grew up uh in a in an auto family uh and and uh rich i wasn't driving the

00:37:33.440 nice cars you had we had the company cars that my father at gm would bring home and things but one

00:37:39.480 of the things i i learned very quickly is he he could buy he was buying and selling cars they were

00:37:45.080 entitled to him and he would sell them before the one year mark because of the depreciation

00:37:49.280 so you know there's a difference when you're buying an asset that may appreciate in value if you

00:37:55.520 buy a collectible versus you know your standard you know off the line car which is going to depreciate

00:38:01.620 so the problem with resident with with residences are it it ties you to a particular location

00:38:12.500 it increases your life inertia it makes you less nimble it has been a great way of increasing

00:38:19.940 the your your your wealth it has a benefit over a t-bill and that you can't sleep in a t-bill

00:38:28.660 um there has always been a fairly liquid market for homes um you know it wasn't as easy as going on

00:38:39.360 saying you know sell microsoft buy apple but you know the with the speed of of uh of home sales it

00:38:48.520 was fairly liquid and it had this huge advantage of capital gain exemption well if you've taken away

00:38:54.360 that capital gain exemption holding that particular asset you still need a place to to sleep um but the

00:39:03.300 advantage of you know and if the market is really depressed because they've taken away the capital

00:39:08.720 gains exemption so nobody you know the prices are are naturally going to drop then you're kind of stuck

00:39:16.060 is there a capital gains exemption in the u.s by the way it's limited on principal residence

00:39:21.620 because you also in the in the u.s you're able to write off your mortgage interest so it's limited

00:39:27.920 to 500 000 in capital gains and then after that you're paying taxes correct what's the tax rate

00:39:33.400 combined well the top tax top tax federal tax rate is 23.8 percent it's 20 percent capital gain and

00:39:41.960 there's a 3.8 percent um uh obama surcharge but they always charge it so it's like kind of like

00:39:49.120 you know hst you got to pay it so um and then you have whatever state you're in there may also be

00:39:56.480 capital gains so if you're in florida there or texas there's no state tax if you're in a high state

00:40:02.160 tax jurisdiction like new york or california now you're now you're you know starting to crank on

00:40:08.480 another 10 to 13 on top of that got it got it um jrr is here in the chat saying david's great and

00:40:16.100 provides a variety of options thanks rich for having him on again yeah if you didn't see the last one

00:40:20.300 that we did um just search for uh david lasferrance on my channel and um it'll pop up you should watch

00:40:27.860 it we talked at length about um passports and i wanted to kind of switch gears now because um i've

00:40:33.760 only got about 20 more minutes and have you talk a little bit about the importance of um i don't

00:40:39.660 know how to even you know define it like the freedom the ability to maneuver um you know one

00:40:44.860 of the points that you made last time which really stuck out for me is that you don't own your passport

00:40:49.400 and and your government has a right at any time if they wish to take it away from you and prevent your

00:40:55.520 travel um i mean they kind of did that in canada anyway um you know with the social credit system

00:41:02.040 that they implemented with vaccination because if you're not vaccinated you can't travel so it's

00:41:05.820 like your passport's kind of useless to fly out of canada if you don't have proof of vaccination so

00:41:10.680 can you talk a little bit more about um passports um the importance of having multiple passports

00:41:17.300 who should consider having multiple passports perhaps what countries are ideal to acquire a

00:41:23.840 passport in so that you have um you know you have a backup plan to your backup plan sort of thing

00:41:29.240 sure and and i actually did a a another blog recently called here today gone tomorrow and i

00:41:37.000 took for example if you were a russian um you know you you could travel around fairly fairly easily

00:41:45.200 get residences and citizenships and things and all of a sudden putin made your russian passport a

00:41:51.820 pariah um what's going to happen when mbs you know the king of saudi arabia is going to

00:41:57.740 die in the next year or so mbs is a young guy he's going to be around for 50 years

00:42:03.400 uh is he going to engage in activities for which the world will view him as a pariah

00:42:09.700 um so you've got that sovereign risk that they will do that you've also got the sovereign risk

00:42:17.220 against individuals you don't want to be wealthy in china these days because we've got the second

00:42:23.880 chinese curse maybe come to the attention of the emperor jack ma and many others so you've got that 0.98

00:42:31.760 you've also so your your passport correct if you look at any passport from any country in in the

00:42:39.900 inside it'll say this is the property of canada u.s australia wherever um so your passport is the

00:42:46.880 document that the government has issued you up to the moment where they haven't where they where

00:42:53.000 they take that away so if they want to restrict your travel for whatever reason because they think

00:42:58.780 that you are a pandemic risk because they are personally going after you because they want your

00:43:05.100 assets because they don't like what you say on the internet they don't like what you say on the

00:43:09.060 internet whatever if you've only got that one document you're you're you're kind of got all your

00:43:16.780 eggs in that one basket so that's one thing you're doing the other is and that's and you want to get

00:43:22.140 fire insurance of alternatives to that the other thing i think i i told the story rich in our last

00:43:28.680 conversation and i always have to premise it that my siblings and i didn't go out nightclubbing

00:43:35.060 looking for europeans to marry but as it turned out my sister married a latview my brother married 1.00

00:43:39.600 an italian i married a pole my sister married an irishman and all of my nieces and nephews have have

00:43:45.920 done everything from study to gap years to work and i've got a nephew that's at trinity college in

00:43:53.000 dublin right now i got a niece that's been in brussels for about eight years so it's also gives you a great

00:44:00.640 amount of opportunity and mobility so if you only had a canadian passport and you had for example and a

00:44:07.600 lot of north americans canadians and americans before thought well um i if i want to go somewhere

00:44:15.720 i saw something in con mass traveler i want to go there oh my god the australians are making me you

00:44:21.120 know pay seventy dollars for for a uh a visa yeah but it's an online kind of airport tax but all of a sudden

00:44:29.800 you couldn't travel and you had some restrictions and that was a big surprise to a lot of north americans

00:44:36.060 whereas for many parts of the world they realized hey i'm i'm from india i'm from you know various

00:44:44.880 countries i can't easily travel i have no guarantee i'm going to be able to get a visa to go to this

00:44:50.320 place and the reason i need a visa was i would you know i came out of my mother's womb in this

00:44:56.500 jurisdiction or i had this this parentage uh whereas north americans we never really had that i had a

00:45:02.940 a little taste of this back during the stars episode i happened to travel to belize on some

00:45:08.120 business and um if you can remember that was uh the time when toronto was noted as a bit of a hotbed

00:45:16.340 and i flew into belize through miami uh so they didn't know i started in toronto and they looked at

00:45:22.860 my canadian passport and all of a sudden you know i was waiting for the guys in the hazmat suits to come

00:45:28.120 out and surrounded me and they they go toronto are you from toronto and and i happened by a complete

00:45:35.800 fluke to have renewed my passport in windsor oh no no i live in windsor okay and i thought that was

00:45:42.300 one of the first times as a canadian where i thought oh my god having a canadian passport isn't

00:45:47.940 is a potential issue and so i had a flash of what it was like for

00:45:53.640 a great part of the world to be able to make sure that you had that because the rights

00:46:00.240 freedoms you have today can be gone tomorrow so um which countries are ideal to look at

00:46:08.900 to acquire a second or like how many passports do you want two three like what's like in your view

00:46:16.580 so you know it's always kind of up for speculation as to what are the what's the best combination of

00:46:22.900 passports to have um for an irish passport is excellent because not only do you have access

00:46:31.280 to the 27 countries of the eu under the treaty of rome you also have access to the uk even after

00:46:39.140 brexit because of something called the common travel uh agreement which was what came into place

00:46:45.540 when they formed the republic of ireland so irish have access to the uk uk have access to irish

00:46:51.280 portuguese for example have access to ireland but they don't have access to to the uk so ireland

00:46:57.280 great is that is that a relatively easy passport to get two ways if you happen to have the right

00:47:02.780 lineage um you can apply for it if you so basically if you have a parent or grandparent who was born

00:47:10.180 in ireland you can get it from lineage if you have somebody a little further beyond you can apply and

00:47:16.600 get a residence permit in ireland uh and you can have you can apply to have a shorter than the

00:47:22.100 normal five-year naturalization period uh by saying you have irish associations and that's generally

00:47:27.420 about three years and or you can qualify for residence permit either under a residence by

00:47:34.240 investment program which is a million um euros or there are some family offices or skilled workers

00:47:40.820 get that wait the five years and become naturalized there so ireland canada is actually pretty good

00:47:47.540 if you don't live in canada because we don't have citizenship-based taxation uh we don't have

00:47:52.780 mandatory military service and we have preferred access to the u.s under what we used to call

00:47:58.880 nafta but now we have to call kuzma and the last one would be new zealand because it has access

00:48:05.760 not only to new zealand but also to australia no military service no taxation based on citizenship

00:48:11.600 um i know there's a lot of people listening to this right now going why would i want to have a

00:48:16.920 passport from new zealand or australia given how they treated people there the last couple of years

00:48:21.880 and lock them right down like they i think they probably had the most uh restrictive policies when it

00:48:29.780 came to this beer bug pandemic sure so but what what it does is that's that's one what you want

00:48:38.340 is a variety of options which you'll use in different situations in some cases that new zealand

00:48:45.120 passport is uh it's not going to be helpful in some cases you'll put you'll pull out the irish

00:48:53.200 passport in some cases you'll want to pull out the canadian passport in some cases you'll want to pull

00:48:58.940 out you know the the new zealand passport so you're getting yourself a variety it's optionality

00:49:05.540 that you're looking at so you're basically becoming james bond and having your three four

00:49:10.800 passport options depending on how you want to travel yeah i had one client that we actually got

00:49:15.980 had eight citizenships for he would have had nine but he gave up his u.s citizenship it was wonderful

00:49:21.100 being his lawyer um but you know he had gone well beyond you know what was you know hedging

00:49:28.820 his bets to take it on as a hobby i mean but if you were if you're to look at kind of a couple of

00:49:35.580 different ones um you want to get into ones that give you the rights to live in multiple jurisdictions

00:49:42.400 so new zealand also has access to australia and the reason i chose new zealand versus australia

00:49:48.380 is because of the the tax rules are if you're going to go actually live in new zealand

00:49:54.600 um that are much more favorable than australia um but it gives you access to australia um so you you

00:50:04.140 put together and the key is what's what fits the person's budget what are their family needs it's

00:50:12.480 also got to be something that you can sell at the breakfast table my first mentor brilliant tax lawyer

00:50:20.340 but you know as many of us lawyers has had a bit of asperger's and didn't really understand kind of

00:50:26.680 and he put together these plans that require people to live on a rock in the middle of the ocean and i

00:50:31.000 go you know nobody's ever going to actually do this and so one of the things is it has to be

00:50:37.020 a balance between what fits for that person fits their budget fits their timelines meets their concerns

00:50:42.680 meets their needs meets their preferences um and so while there's a lot of commonality each one is

00:50:53.720 kind of you know fit to measure at the end of the day what what's a percentage of the population you

00:51:00.780 think actually takes these measures to allow the flexibility and freedom uh you know to travel to

00:51:07.740 live and move around the world like is it less than one percent of people that do this depends depends

00:51:13.880 on the jurisdiction so if you're in a place like hong kong or china you're going to have 60 or 70 percent

00:51:21.460 of the people will have some alternative residence or citizenship because they've been thinking about

00:51:26.380 it for a long time you know um when you're looking at north americans americans and canadians

00:51:32.620 they're they're much earlier in the adoption phase so they're and they're which means that they're also

00:51:42.100 lower on the on the the learning curve on kind of what's involved in in in getting all these things

00:51:48.300 so they're much more susceptible to what i call the the the citizenship by investment sales people

00:51:55.120 now i'm gonna i'm you know made a whole bunch of money in crypto i'm gonna listen to katie the

00:52:00.780 russian and get citizenship in dominica and okay i've got citizenship in dominica it's done nothing

00:52:06.880 for you tax-wise um i actually just did an analysis uh on satoshi island which is this island in vanuatu

00:52:16.080 that's supposedly coming out with nfts and that you're supposed to rush there and and buy them if

00:52:22.380 you're into crypto and kind of okay let's ask some basic questions about it um so you know and and

00:52:29.320 so i i just wrote a blog called satoshi island uh is this blockchain's new fire festival um

00:52:37.320 and so it's you getting yourself learning learning about these things uh so that you're an informed

00:52:44.940 consumer and you can also tell the difference between kind of somebody who really knows what

00:52:51.080 they're talking about and and again i work with a team um so while my particular expertise is getting

00:53:00.040 and getting rid of resident citizenships and domiciles i know how that impacts taxation i know

00:53:06.920 how it impacts lifestyle i know how it impacts family law for example people always focus on taxes

00:53:14.220 taxes taxes are a percentage of income divorce is a percentage of capital and so people would rush

00:53:21.440 to the uk this is a tax haven and then discover oh my god it's a it's a divorce capital

00:53:27.200 and half of my stuff is is gone so you know you have to look at all these kind of issues

00:53:35.380 and again come up with a plan which you can which makes sense financially but that you can also

00:53:42.240 sell at the breakfast table you know if there's other family members that are involved um and it

00:53:47.880 fits the timetable of the people i mean of course you know you're going to be doing having different

00:53:55.180 concerns when you've got young children versus when those children are heading out the door for college or

00:54:02.000 adulthood um etc so where are you in in can do you need to be in a specific specific location to

00:54:12.060 make and maintain your wealth have you got the ability to you know if you're uh investing um you know

00:54:22.700 you may you'll have more options if you're a landlord of residential properties well you better make sure

00:54:28.560 that you have access to be able to go and check on those properties whereas if you're you know

00:54:34.800 investing in in public or private markets you don't need to be in physical proximity to those assets

00:54:42.420 gotcha um all right guys i gotta start to wrap up so um if you're interested in any of the stuff that

00:54:50.260 david's been talking about you should reach out to him his website is lesperance associates.com

00:54:55.860 um and he's the kind of guy that can help you build a passport portfolio that will give you the

00:55:02.060 freedom to travel and reside where you please um who's the ideal client for you like is there a

00:55:07.080 certain net worth that you need um it it depends so i have everything from um young professionals who

00:55:17.540 are kind of you know digital mobiles but they also have the ability of they don't have a lot of life

00:55:22.300 inertia they don't have a house and a spouse and the dog so they're much more flexible and they've got

00:55:27.460 got time periods um all the way to um people you know business owners i have a particular um

00:55:36.740 uh developed a particular expertise with regards to people in the crypto ecosystem everything from

00:55:44.260 uh early adopters to um miners to exchange founders to you know people who are engaging in in defy

00:55:54.000 uh looking at nfts uh those types of things um it's just i've gotten very good at you know how

00:56:02.180 different jurisdictions treat that from a tax point of view and so everything from satoshi adam the place

00:56:10.400 to go to puerto rico el salvador berlin is an african country now that's made it legal tender i can't 0.67

00:56:18.720 remember which yeah central uh central african republic yeah so um yeah um reach out and find

00:56:25.480 david if uh you need some uh proper guidance on this and he can help you facilitate whatever it is

00:56:31.520 that you're trying to structure again um if you guys are so another part of this cast which i kind

00:56:38.360 of hit on at the very beginning is um the kind of people that move around that have multiple passports

00:56:43.800 that that that figure out how to minimize their tax obligations to centralized governments uh are

00:56:50.860 generally entrepreneurs right so they run and own their own business so my course the school of

00:56:55.780 entrepreneurship is currently open for enrollment the link to join is pinned at the top of the live chat

00:57:01.140 it's also going to be in the description and pinned at the um top comment today's april 28th the course

00:57:08.260 is only open for enrollment until the 30th it's offered at 997 and what it does is it

00:57:13.600 explains to you what the best and most successful entrepreneurs do to structure their businesses so

00:57:19.040 it's easy lucrative and fun for them to operate because the vast majority of people that start

00:57:24.340 businesses and i'm sure dave you've dealt with a lot of guys like this they structure them in such a way

00:57:28.420 where they're hard annoying lame and frustrating there's not a lot of profit they've got all kinds

00:57:32.660 of issues they've got tax issues they just don't run it right and you really have to take into consideration

00:57:38.320 if you're going to lean into entrepreneurship as a starter or if you're currently running

00:57:42.760 something that's not working for you what the best are doing and i've collected all that information

00:57:48.460 i've sanitized it and distilled it in this course you can go check it out again the enrollment closes

00:57:53.200 in two days so if this is something that interests you check it out guys david any closing thoughts

00:57:59.000 before we run yeah just on that part of that fire escape plan is when you're looking at the types

00:58:05.940 of businesses and the types of things you're talking about uh rich on on setting up and running your

00:58:11.780 businesses have a view to you know future doing this in in different locations and what is going

00:58:20.580 to be the tax ramifications and so that'll have a big impact on the choices that you make in what

00:58:26.100 paths you start on it's much better to kind of think about those things earlier as opposed to later on

00:58:32.860 trying to unravel unravel things and a final thought is for those people who are really want to kind

00:58:39.220 of start to get up to speed on this i'd recommend kind of reading a lot of my blogs and uh and media

00:58:45.040 posts you'll find a lot of good information in there thanks david um we'll see you guys next time

00:58:50.000 give the video a like and comment below and we'll see you in the next show and thanks for putting up for my

00:58:55.340 thank you

00:58:55.540 you

00:58:59.360 you

00:59:03.660 you

00:59:05.400 you

00:59:07.160 you

00:59:09.380 you

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Playing to Win - May 13, 2022

066 - Multiple Passports & New Taxes Threaten Homeowners

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