How long do you have to live in a home for tax free in
My question is: Canadian-specific QUESTION: I recntly puchased and live in a condo. I have only been in here for a month and a half. If I sale and make a gain, do I have to pay capital gains tax. How long to I have to reside before I do not have to pay the taxes --------------------------------------------------------------------------- david ingram replies: No time to answer this specifically so am answering it with an old reply. My question is: Canadian-specific QUESTION: If I bought and moved into a house and decide 6 months later that I don't like it and sell that house to move elsewhere do I attract capital gains on the sale of my home? ================================= david ingram replies: And how high is up? If you bought a house to resell any profit is taxable at ordinary income rates unless you can get it into another category. If you bought a house or cabin to rent or use as a second home and decide ten years later to sell it for some reason or other, it is likely a capital gain. If you buy a house and decide to sell it in six months, you can expect that the CRA "might" try and tax you at full rates unless you can show that the house was truly your principal residence and that you sold it for reasons other than making a profit. reasons might be: 1. You lost your job 2. The school your child goes to is just not any good 3. You cannot stand your neighbour 4. You get divorced 5. you are transferred to another city 6. You are pregnant and need a bigger house 7. My favourite was a couple who ended up in a battle with organized druggies and sold out in fear of their lives. However, if you bought a fixer upper and fix it up and sell it and buy another fixer upper around the corner and your kids keep on going to the same school and you shop at the same stores and catch the same bus, etc., you will be paying straight tax. The US is different. In Canada it is "all" tax free as a principal residence or taxable. In the USA, you have to have lived in the home for 2 out of the last five years to claim up to $250,000 tax free per person. If you sell before the 24 months is up for a good reason - death of a spouse job transfer, job loss, etc. - then you can prorate the $250,000 by multiplying $250,000 by the number of months you were in it divided by 24 (12 months would be $125,000 for instance). ========= Answers to this and other similar questions can be obtained free on Air every Sunday morning. Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier Partners and I will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY" Those outside of the Lower Mainland will be able to listen on the internet at www.600AM.com Local phone calls to (604) 280-0600 - Long distance calls to 1-866-778-0600. Old shows are archived at the site. This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer from www.centa.com or www.jurock.com or www.featureweb.com. 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