Property in Canada - Capital Gains Tax query $$
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Hello All
I wondered if anyone with Canadian real estate knowledge could advise?
At some point, we will have to sell our house in Kelowna (BC) that we bought as an investment 2 years ago. We're still living in the UK, waiting for our visas and want to buy in Vancouver next year. I understand we'll have to pay a whopping 50% Capital Gains Tax on the equity we've accumulated?! Is that correct?
It also says that you can avoid this if you make the property your principle residence - how long do you have to live in it to avoid the tax?!
I don't want to give money to the government if I can possibly help it, much as I want to be in Canada :-)
Any advice much appreciated. I guess I need to find a tax advisor or accountant......
Thanks
Linda & Neil
I wondered if anyone with Canadian real estate knowledge could advise?
At some point, we will have to sell our house in Kelowna (BC) that we bought as an investment 2 years ago. We're still living in the UK, waiting for our visas and want to buy in Vancouver next year. I understand we'll have to pay a whopping 50% Capital Gains Tax on the equity we've accumulated?! Is that correct?
It also says that you can avoid this if you make the property your principle residence - how long do you have to live in it to avoid the tax?!
I don't want to give money to the government if I can possibly help it, much as I want to be in Canada :-)
Any advice much appreciated. I guess I need to find a tax advisor or accountant......
Thanks
Linda & Neil
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Hello All
I wondered if anyone with Canadian real estate knowledge could advise?
At some point, we will have to sell our house in Kelowna (BC) that we bought as an investment 2 years ago. We're still living in the UK, waiting for our visas and want to buy in Vancouver next year. I understand we'll have to pay a whopping 50% Capital Gains Tax on the equity we've accumulated?! Is that correct?
It also says that you can avoid this if you make the property your principle residence - how long do you have to live in it to avoid the tax?!
I don't want to give money to the government if I can possibly help it, much as I want to be in Canada :-)
Any advice much appreciated. I guess I need to find a tax advisor or accountant......
Thanks
Linda & Neil
I wondered if anyone with Canadian real estate knowledge could advise?
At some point, we will have to sell our house in Kelowna (BC) that we bought as an investment 2 years ago. We're still living in the UK, waiting for our visas and want to buy in Vancouver next year. I understand we'll have to pay a whopping 50% Capital Gains Tax on the equity we've accumulated?! Is that correct?
It also says that you can avoid this if you make the property your principle residence - how long do you have to live in it to avoid the tax?!
I don't want to give money to the government if I can possibly help it, much as I want to be in Canada :-)
Any advice much appreciated. I guess I need to find a tax advisor or accountant......
Thanks
Linda & Neil
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Good luck - we completed yesterday on our new place as non-res (a month after we sold the last one) and are playing the waiting game to see if our accountant was right when he did the math - we should get a %age back in 30 days with tax clearance cert and then we have to wait until next Feb to get the rest... I have to say I let the lawyers and accountants do it all as it makes my head hurt!
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Hello All
I wondered if anyone with Canadian real estate knowledge could advise?
At some point, we will have to sell our house in Kelowna (BC) that we bought as an investment 2 years ago. We're still living in the UK, waiting for our visas and want to buy in Vancouver next year. I understand we'll have to pay a whopping 50% Capital Gains Tax on the equity we've accumulated?! Is that correct?
It also says that you can avoid this if you make the property your principle residence - how long do you have to live in it to avoid the tax?!
I don't want to give money to the government if I can possibly help it, much as I want to be in Canada :-)
Any advice much appreciated. I guess I need to find a tax advisor or accountant......
Thanks
Linda & Neil
I wondered if anyone with Canadian real estate knowledge could advise?
At some point, we will have to sell our house in Kelowna (BC) that we bought as an investment 2 years ago. We're still living in the UK, waiting for our visas and want to buy in Vancouver next year. I understand we'll have to pay a whopping 50% Capital Gains Tax on the equity we've accumulated?! Is that correct?
It also says that you can avoid this if you make the property your principle residence - how long do you have to live in it to avoid the tax?!
I don't want to give money to the government if I can possibly help it, much as I want to be in Canada :-)
Any advice much appreciated. I guess I need to find a tax advisor or accountant......
Thanks
Linda & Neil
If you sell it before you land, you will be very hard pressed to convince CRA that it is your principal residence. If you sell if after you land as PRs, it should be relatively simple to show it is your principal residence. This is basic advice based on what you have stated and its accuracy is, of course, dependant upon many variables.
HTH
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Hello All
I wondered if anyone with Canadian real estate knowledge could advise?
At some point, we will have to sell our house in Kelowna (BC) that we bought as an investment 2 years ago. We're still living in the UK, waiting for our visas and want to buy in Vancouver next year. I understand we'll have to pay a whopping 50% Capital Gains Tax on the equity we've accumulated?! Is that correct?
It also says that you can avoid this if you make the property your principle residence - how long do you have to live in it to avoid the tax?!
I don't want to give money to the government if I can possibly help it, much as I want to be in Canada :-)
Any advice much appreciated. I guess I need to find a tax advisor or accountant......
Thanks
Linda & Neil
I wondered if anyone with Canadian real estate knowledge could advise?
At some point, we will have to sell our house in Kelowna (BC) that we bought as an investment 2 years ago. We're still living in the UK, waiting for our visas and want to buy in Vancouver next year. I understand we'll have to pay a whopping 50% Capital Gains Tax on the equity we've accumulated?! Is that correct?
It also says that you can avoid this if you make the property your principle residence - how long do you have to live in it to avoid the tax?!
I don't want to give money to the government if I can possibly help it, much as I want to be in Canada :-)
Any advice much appreciated. I guess I need to find a tax advisor or accountant......
Thanks
Linda & Neil
As Almost Canadian says above, you do not pay 50% of the gain as tax. This often causes confusion, but in fact you pay tax on only 1/2 of the net gain you make, the other half is tax free.
You will have to pay the tax. There is no way around it. Canadian tax law only allows a family unit to have one principal residence, and yours in quite clearly in the UK and not in Canada.
The withholding tax rate is 25% but you will get a refund when you file a tax return for the year.
If you decide not to sell the house until you land in Canada, and become tax resident here, you can live in the house and it becomes your principal residence from that date. Technically, at that date there is a deemed disposition at fair market value and you would include the taxable capital gain in your income for that year. However, you can elect under subsection 45(2) of the Income Tax Act to defer the gain until you eventually sell the property.
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Thank you all for your comments. We are gathering the information together on what we need to do. Many thanks.
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That would be a mistake too. Over the years I have had so much duff advice from CCRA its not even funny.
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Hello All
I wondered if anyone with Canadian real estate knowledge could advise?
At some point, we will have to sell our house in Kelowna (BC) that we bought as an investment 2 years ago. We're still living in the UK, waiting for our visas and want to buy in Vancouver next year. I understand we'll have to pay a whopping 50% Capital Gains Tax on the equity we've accumulated?! Is that correct?
It also says that you can avoid this if you make the property your principle residence - how long do you have to live in it to avoid the tax?!
I don't want to give money to the government if I can possibly help it, much as I want to be in Canada :-)
Any advice much appreciated. I guess I need to find a tax advisor or accountant......
Thanks
Linda & Neil
I wondered if anyone with Canadian real estate knowledge could advise?
At some point, we will have to sell our house in Kelowna (BC) that we bought as an investment 2 years ago. We're still living in the UK, waiting for our visas and want to buy in Vancouver next year. I understand we'll have to pay a whopping 50% Capital Gains Tax on the equity we've accumulated?! Is that correct?
It also says that you can avoid this if you make the property your principle residence - how long do you have to live in it to avoid the tax?!
I don't want to give money to the government if I can possibly help it, much as I want to be in Canada :-)
Any advice much appreciated. I guess I need to find a tax advisor or accountant......
Thanks
Linda & Neil
we are moving to BC soon and are thinking of kelowna. Can you email me with your property details please? Steve. <email removed>
Last edited by Biiiiink; Apr 5th 2008 at 11:32 am. Reason: email removed - use the PM facility to avoid spam
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Hi Steve
We aren't going to sell the house now until we're in Canada so it won't go on market for another couple of years ..not much use to you! The local Kelowna agents are great though - i don't think I can name them on here. We used them to buy it and had no problems. All done in 3 weeks!
We aren't going to sell the house now until we're in Canada so it won't go on market for another couple of years ..not much use to you! The local Kelowna agents are great though - i don't think I can name them on here. We used them to buy it and had no problems. All done in 3 weeks!
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