Flaherty says tax break not on table

Fri Apr 18, 2008 3:26pm EDT
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TORONTO (Reuters) - Canadian Finance Minister Jim Flaherty said on Friday the government could not afford to grant a capital gains tax deferral to real estate investors during tough economic times.

The Conservative government promised in the last election campaign to introduce a deferral of the tax on capital gains for investors who reinvested assets within six months.

Investors, particularly those who buy and sell real estate, have eagerly awaited the policy change but have yet to see any action from the Conservative government after more than two years in power.

Flaherty has repeatedly said his office is working on different options for lowering capital gains tax payments, but on Friday he sought to play down expectations amid signs the economy is slowing.

"There have been some suggestions about transferring of property and reinvesting in property and avoiding capital gains there," Flaherty told reporters after a speech in Oshawa, Ontario.

"I can tell you, this is not about to happen. I don't want anyone to have raised expectations because it is not about to happen. This is a time of economic restraint in Canada, this year and next. So, it's not on the table to happen in the short term."

(Reporting Frank Pingue, writing by Louise Egan; editing by Rob Wilson)

<p>Canada's Finance Minister Jim Flaherty speaks during Question Period in the House of Commons on Parliament Hill in Ottawa April 17, 2008. REUTERS/Chris Wattie</p>