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My question is: Canadian-specific
QUESTION: Hi David,
16 months ago we purchased and our first home on the Westside of Vancouver (townhouse: $215,000) and sold it 11mths later for $285,000. We then purchased a house for $400,000 on the Eastside and now 3 months on (with extensive renovations approx: $22,000 in total expenses) we have decided to sell it due to financial pressures. We now have an accepted offer of $505,000. Our next step is to downsize, and we are looking at buying a condo downtown. My question is: will the sale of the house be classified as primary residence capital gains or will CCRA apply straight tax? Thank you for your time and information.
Kind regards,
MXXXXXXXXXXXXX
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david ingram replies:
Obviously, I have to get a life - otherwise I would not be answering this at 3:00 in the morning.
If the CCRA hits on you, they will do their best to tax you at full rates even though you may truly have bought the properties to live in. An unwritten CCRA rule seems to be that if there are three buys and sells in two years, you are fair game. So what you have told me is that there will be five in two years. 1. bought, 2. sold, 3. bought, 4 sold, 5 bought.
Go to www.centa.com, click on tax guide and click on Capital gains for 27 pages of information about when and how the CCRA taxes real estate sales.
We forget the fact that the very purchase and sale of anything is taxable at full rates UNLESS it falls into some criteria.
1. In the case of the stock market, you make an official election to be treated as an investor and thus taxed at half rates.
2. In the case of a house you lived in, tax free if it was bought for the LONG TERM use as a personal residence and not to flip or to remodel (while living in it) and flip.
3. In the case of a piece of rental property or farm property or business property, or a summer or winter cabin, or collectibles or art or antiques, they would be taxed as a capital gain at half rates because the item was bought for long term personal enjoyment or long terem investment.
Just about anything else is taxable at full rates.
You should consult good professional help when doing your return.
We, of course are available as below.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321
[email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
This from "ask an income tax and immigration and bankruptcy expert" from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, Indonesia, Egypt, Antarctica, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and Canadian and Mexican and any of the 43 states with state tax returns, etc.
Alaska, Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon. Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec City, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Yukon and Northwest and Nunavit Territories, Mount Vernon, Eumenclaw, Coos Bay and Dallas Taxman and Tax Guru Your name has been added to our email list because of an enquiry we have received, we may not answer your question but
another similar question will be as we lump them.
You may find more answers at www.centa.com
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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