Rental and home property. Need pay more tax due to the rental income when sell it?
The Bank of Canada has hiked its interest rate by basis points to 1.5 %, and signaled that more hikes are on the way. Will this affect house market? Yes, of course. So this time is a 50 base point. It's a very heavy one. It's very big. So what we know is the last time is only 25 %. So 25% is not that much, just let, you guys know, and they will do that, but right now they just dig 50 base port and they just want to show you the signal they are really serious.
They really want to do something. They really want to increase the interest rate to fight the inflation rate. So absolutely it will affected the market. And for the investors, they will calculate, and what's the cost for them to buy or to maintain the practice? And Western mortgage every month, how much they can collect the right? Can the ruin and cover the mortgage? If they cannot cover the mortgage, what can you do?
If they have properties or already probably, if they are all losing money, probably they will think about to sell the property. Because they are losing They are using their cash to cover it, to fix it, to pay the mortgage. Is not good idea for them, right? So for a short time, is fun, but if it is a short time, for three months, half a year, one year, how much cash do they have to cover the loss? Right? So probably there is a thing about it to sell it.
So if they bought this property like $1 million, and right now the market value is $2 million, if they are losing money, what will they think? If you were the owner, what will you think? Sell it? Right? If you are losing money, if you are losing $1000 a month, and even you sell it million dollars, and you still make 800000, and plus, you will stop the losing out every month, right? So even you'll sell the one point, even you sell the 1 lb. $5 million, you made money already.
So for this kind of sellers, and for these kind of owners, they will think about it to sell it, to make the profit. OK? So if this think about to buy more, to invest as the investor, they calculated the cash flow as well, so before the interest hike and their mortgage cost, their money cost is very low, so even they collect, like $1000, $2000, right, they can cover the mortgage. But right now, can they increase the right?