The Tax Questions Blog

Posts Tagged ‘what is taxable canadian property’

Question: Questions for property's capital gains tax?

I bought my 1st house in July 2001 for 247K, we lived there until August 2005 when we bought another house. We re-financed and rented out the 1st property since then until I moved back in in Feb/07 and live there till present time. Now I am selling that 1st property for 320K and I want to know if I have to pay capital gains tax on it? if yes how the tax is calculated?
The taxable amount of the capital gains is the gross ( 73K, from 320K-247K) or the net? (73K minus all lawyer fees, repays of Home Buyer Plan, up-grading expenses, penalty for mortgage, etc.)
I heard that US only charge Capital gains if you lived less than 2 years in the property, and only if the capital gains is more than 250K, is that apply to Canadian Tax too?
Since I am living there (1st property) now, what do I need as proves that it is my residential property.
Can I go around with the Capital gains tax if it's apply to me?
Thank you in advance.

Answer: When you stopped living in the 1st house, you are deemed to have disposed of the house at fair market value. Since the house was your principal residence, there would be no capital gains tax on this "deemed disposition." The fair market value would then become your cost base for the rental property.

Then, when you moved back in, there would be another deemed disposition of the rental property at fair market value, and this would result in a taxable capital gain, as the property was no longer your principal residence. There is however an election whereby you can designate the property as your principal residence (even though it wasn't) for up to four years from the date that you started using it as a rental property, but this would not be allowed if during the same period you had already had designated another property as your principal residence.

In any case, you could deduct related costs such as lawyer fees, commissions, repairs etc. from the capital gain, but not repayments to the Home Buyer Plan.

As you can see, this is a somewhat complex situation and I recomment that you consult a professional accountant for advice.

Peyto Exploration & Development Corp. Announces First Quarter 2011 Results, 32% Production Per Share Increase and ...

CALGARY, ALBERTA--(Marketwire - May 11, 2011) - Peyto Exploration & Development Corp. ("Peyto") (TSX:PEY.UN) is pleased to present its operating and financial results for the first quarter of the 2011 fiscal year. Peyto grew production 53% year over year or 32% per share since Q1 2010, while generating first quarter operating margins of 75% (1) and profit margins of 32% (2) . First quarter 2011 ...

Orlando Foreclosure| Short Sale Cleanout 321-216-1442

The Canadian Real Estate Association has come out with figures alarming to home sellers, but great for home buyers. With sales tumbling by 17 per cent in 2008, the market has been primed, but the prediction of another near-17 per cent tumble in 2009 indicates that the buyer's market isn't changing any time soon. Recent drops uphold the prediction of falling sales and the subsequent falling home prices that make Canadian homes a great buy for the real estate buyer.

In February of 2009, resale home prices dropped an average of 9.6 per cent in Canada alone. This summer, there has been an increasing amount of home purchases, but the market isn't rallying. Even new homes have experienced a slowdown, with new home prices down 3.3 per cent in June, from June 2008. Western Canada is currently experiencing the largest price drops.

All these statistics mean that it's a great time to buy for the Canadian home seeker. The market always turns around and by the time you are ready to move or sell, your home could be worth significantly more than you bought it for, especially in hot markets like Calgary, AB. This is potentially a long-term investment, but while you are waiting to realize it, you will have your own property to live on or rent out.

Real estate is the first best investment. Stocks will fluctuate, mines run out and popular items fall out of vogue, but people always need a place to live. With sensible investment in a good piece of property, you may not get rich, but you will be putting your money into something that can keep you financially stable, help with your taxes and solidify your position in the community. However, many Canadian millionaires made their money from careful real estate investment, so if you start on the road to multiple property ownership, you may realize financial success in ensuing years.

One important aspect of falling home sales is the corresponding fall in interest prices. Interest rates are at significant lows these days; something just as, if not more important than your actual home price. With low interest rates, you can lock in a rate that will take you through your entire mortgage with a payment cheaper than rent for a comparable property.

Now is the time to invest in Canadian real estate. Your investment now will be realized in the long term with equity and rising home values. You must have patience to realize your investment, but you will find that real estate is one of the most stable financial investments you can own and the one most calculated to bring you financial security.

Workers demand living wage from mall

The holiday wish list for the owners and stores at Queens Center Mall most likely included increased sales. It probably didn’t include being called a “publicly subsidized poverty wage center.”