Canadian Residence Selling property in Holland - david ingram expert US CANADA cross border non-resident income tax help and pre


QUESTION:

Me and my spouse are Canadian residents since 4 years. My spouse still owns a property in Holland. If he would sell this
property would he have to pay taxes in BC?
Would it make a difference if he would save the money for retirement or invest it in a business?
   
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david ingram replies:

The property in Holland was deemed to have been sold and reacquired when you came to Canada.  

Therefore, it does not matter what your husband paid for it, the defining moment for Canadian Tax was the day you came to Canada.

Determine its value that day in Canadian dollars.

When it is sold, there will be Canadian tax on any increase in value from the day you came to Canada until the date it is sold.

UNLESS

1.  You did not buy a house in Canada and are renting and

2.        The property in Holland has been empty and you kept it as a seasonal residence or a place to visit.

BUT

If you bought in Canada or the Holland property was a rental property it will be subject to Canadian  income tax.

AND - remember, if it is/was a rental property, your husband needed to report the rent on his Canadian return on schedule T776.

Hope this helps and remember we are here to help if necessary.

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