This email address was down for about 36 hours - it would not send or
receive and then magically started working when and as I phoned SHAW. As a
consequence, I have dumped about fifty emailed questions as just too much to
deal with. If you were one of our paying clients and sent something, it may
have been dumped. Please resend if so.
And for my 37 readers in the Boston Area, Remember that the Boston Common
Xmas tree is donated every year by the City of Halifax as thanks for the
help that Boston gave Halifax during the great Halifax explosion on Dec 6,
1917.
david ingram
==========================
My question is: Canadian-specific
QUESTION: I own a home in a rural area of Nova Scotia. I have lived in
Halifax (the capital) for about 10 years now. I am currently trying to
sell the house and have two questions:
- due to the extensive renovations/upgrades and the fact that I don't
live there, do I have to pay capital gains on the property? I moved away to
get an education and a job.
- if I buy a property here in Halifax before selling the rural
property, do I have to pay extra taxes?
I've been told if the rural home is classed as the primary residence I
would be okay. Can you explain the tax/capital gain requirements of this
scenario?
---------------------------------------------------------------------------
david ingram replies:
Did you rent in Halifax or own another place?
Was the rural property (where was it) rented while you lived in Halifax
or
was it used by you on the odd weekend and for summer vacations?
david ingram
==================
Hi David
I know I replied to this previously but I thought more about this and
since I've not gotten a response I would like to add the following:
- I currently rent in Halifax
- home in Canso only used by friends and family in last two years for
vacation time
- originally purchased for approx 20,000 in 1993
- about 50,000 in upgrades added such as anew roof, plumbing, upgraded
electrical, added a 4 foot wall underneath (was a rock foundation), gutted
the interior and rebuilt the inside improving layout and added living
space, and more over 8+ years (retirement project for my father) not
including labour costs of my father (he did it for free)
- on market for about 95000
Many thanks for taking the time to read and advise on this situation. I
would like to purchase a condo here in Halifax in the next couple of
months so any help is appreciated. Also, I was told there is an income
tax refund you can get before purchasing to use as downpayment - is this
true?
thanks again
E
================================
david ingram replies:
I have driven across the Canso Causeway a few times and like the area.
Driven around the French Shore and seen just about all of Cape Breton Island
from Big Pond to Louisburg - great place.
But, enough of a travelogue. As you have described it, the Canso home was a
vacation retreat, perhaps occupied by your father and friends and yourself
but not rented. If this is the case, there is NO capital gains tax on the
sale.
And if you lived in it for a year before moving to Halifax, and rented it
out for three or four years, and then kept it as a personal vacation home,
you can likely make a retroactive election under Section 45(2) to declare it
as your principal residence and claim it tax free by filling in form T2091.
http://www.cra-arc.gc.ca/E/pbg/tf/t2091_ind/t2091-ind-04e.pdf
the worksheet is at
http://www.cra-arc.gc.ca/E/pbg/tf/t2091_ind_-ws/t2091_ind_ws-03e.pdf
Good luck on the sale and happy condo hunting in Halifax.
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