Canadian moving into his rental house has a deemed

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QUESTION: I have a questions regarding Capital Gains. If I move into a house that has been rented for about 2 years and then make it my principle residence. It is deemed change in use and capital gains occurs. What determines what the house is worth at the time of the move. Is is the value declared on the notice of assessment or do you need some other independent
appraisal to determine the worth. Any help would be greatly appreciated.
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david ingram replies.
Any figure you use is okay for general use if you believe it to be a true figure.
If you want to be prepared for a tax audit, you should pay a certified appraiser to prepare an appraisal for you.
Then you would have ammunition for the CCRA if they challenge you.
However, a challenge is very rare.  I have only had one such challenge in the last five years out of a couple of hundred property sales in similar  circumstances.
Although there is a deemed change of use and you trigger capital gains tax possibilites when you move into a rental property, you can make an election (under Section 45(3) of the income tax act) to defer paying the actual tax until you actually sell the property.
Remember that this is what we do for a living at the new address below
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