Name: xxx
the_email: xxx@xxxxx
My question is: Canadian-specific
QUESTION: I have a family now and am planning to move to a house. I
currently live in an apartment in downtown Vancouver, BC and would like to
hold it and rent it out. My concern is the taxation involved if I want to
sell the apartment in 3 years, for example. How will I be taxed? Am I
better to sell now, realize the capital gains, and move on?
Thanks!
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david ingram replies:
If you are moving into a rented house and declare the apartment to be your
personal residence, you have 4 years with no capital gains tax.
If you are buying the new house, you have a choice of paying tax in the
future on any profit in the same time period on the house and claiming the
apt tax free or paying tax on the apartment and claiming the house tax free
in the future for the same time period.
When it does come time to pay tax on any profit, 50% will be added on top of
any other income you have.
If the apt went up $50,000, you would have to add $25,000 to the top of your
other income. If your other income was $70,000, you would be paying about
37 to 40% of $25,000.
If the condo is owned by two of you, you would be reporting 1/2 of 1/2 each.
--------------
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