Canada to ban foreigners from buying homes

Re:Canada to ban foreigners from buying homes by earleybird on Friday April 08, 2022 @01:19AM (#30953572)

The CRA is fairly particular[0] about income from the sale of a property. They want to know, for example, how long it has been your primary residence and if it was rented before then, what was the appraised value. You will end up paying capital gains on the delta. So, if you've been renting out a property, move in to it for 6 months and then sell you'll be paying capital gains on everything but the last 6 months. The only time that works out is with a sudden spike in values.

[0] source: an accountant I know that wants to stay in good standing with the CRA :-)

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Re:Canada to ban foreigners from buying homes by Ensorceled on Friday April 08, 2022 @08:25AM (#30956018)

The point is that you have changed your principle residence to the new property and, hence, it is not taxed on sale.

"When you change your principal residence to an income producing property, such as a rental or business property, you can make an election not to be considered as having started to use your principal residence as a rental or business property. This means you do not have to report any capital gain when you change its use. "

https://www.canada.ca/en/revenue-agency/services/tax/individ...

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Re:Canada to ban foreigners from buying homes by earleybird on Friday April 08, 2022 @02:42PM (#30960934)

The scenario allowed in your reference is not the same. The original scenario was a rental/income property declare principle (for some short period of time) for the purpose of shielding capital gains whereas the exemption you reference is a principle residence allowed to be used for rental/income. Note that you cannot declare another property as principle while you're renting out your homebase. I expect it is meant for cases where you might take a job transfer for a period of time.

The taxman never leaves money on the table.

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