Jayson Lowe explains how selling a rental property can spike your taxable income and trigger an OAS clawback, wiping out your benefits for the year. The hidden tax from this clawback can run $8,500 to $9,000.
Any employment income that you had in the year your Canada pension plan which is also a taxable benefit. So all of these different line items add up to a total and that can bring your total into that clawback scenario often quicker than you would anticipate and the actual income paid from the OAS itself goes into that total. As an example let's say you sold a rental property in a given year. Probability is it could blow you right past the entire maximum so you could have no old age security paid out at all. So that could represent you know roughly speaking an 85 to $9,000 quote unquote hidden tax in that it's money that you did not receive because you sold a property in that year. That's something to be aware of when you consider strategic property sales or income events that might come up almost as a surprise event to some degree in different years. You really want to start planning and thinking those things through to see how you can mitigate how much of the clawback scenario you would put yourself.
