Originally Posted by al8565 (Post 10741293)

Hi,

I understand at your Point Of Entry into Canada as a temporary resident you have to value your foreign home, but I can't seem to find anything on what is acceptable to value a home.

Our house will be rented out since nothing has sold in the area for some time. Even the online valuer won't value house as no comparable sales in the last 12 months.

How have others valued their homes at entry?
Is it something that can be contested later if we don't agree?

If you weren't aware of this requirement, not quite sure what they would do when you arrive at the border. Maybe it can be set at a later date?

Thanks.

Originally Posted by al8565 (Post 10741293)

Hi,

I understand at your Point Of Entry into Canada as a temporary resident you have to value your foreign home, but I can't seem to find anything on what is acceptable to value a home.

Our house will be rented out since nothing has sold in the area for some time. Even the online valuer won't value house as no comparable sales in the last 12 months.

How have others valued their homes at entry?
Is it something that can be contested later if we don't agree?

If you weren't aware of this requirement, not quite sure what they would do when you arrive at the border. Maybe it can be set at a later date?

Thanks.

Originally Posted by Aviator (Post 10741402)

If you are becoming a tax resident in Canada and own foreign property it is wise to get a valuation in writing prior to arrival. This would be if you disposed of the property whilst a tax resident and if a capital gain arose. Get the BOC FX rate for the day as CRA would calculate in CDN$.

Not sure who you would dispute the valuation with, if you hire a professional to do it for you, you can hardly tell them they are wrong.

The value is set at the day you become a tax resident, it is not a fluid date.

If you leave and don't sell the property, it is a non issue. You may want to look at the T1135 from CRA if filing tax returns as a tax resident.

Originally Posted by al8565 (Post 10741412)

Thank you for the reply Aviator. The valuation is the tricky bit, the house is an insurance write off and will be rebuilt within the next few years. So currently hard to value, but in time will be a new house.

I think it can remain our principal residence and avoid capital gains as long as we don't buy a house in Canada.

Originally Posted by al8565 (Post 10741412)

Thank you for the reply Aviator. The valuation is the tricky bit, the house is an insurance write off and will be rebuilt within the next few years. So currently hard to value, but in time will be a new house.

I think it can remain our principal residence and avoid capital gains as long as we don't buy a house in Canada.

Originally Posted by dbd33 (Post 10742300)

It seems to me that this is a case where having a valuation would hurt the owner. If there's a valuation based on bare land or smouldering ruins, a house is built and sold, then there's a large gain in value. If there's no valuation then, when the house is sold, a reasonable estimate of value gain might be used. The reasonable estimate might be based on numbers from adverts or websites taken at the time of immigration to Canada of houses similar to the one that's to be built. The claim would be that the nominal increase in value is that from the comparable house values to the actual sale value. Maybe RevCan disputes the estimate but probably not the extent of saying that the right estimate should be based on there being nothing on the site at the time of immigration.

Originally Posted by al8565 (Post 10741293)

Hi,

I understand at your Point Of Entry into Canada as a temporary resident you have to value your foreign home, but I can't seem to find anything on what is acceptable to value a home.

Originally Posted by al8565 (Post 10741412)

Thank you for the reply Aviator. The valuation is the tricky bit, the house is an insurance write off and will be rebuilt within the next few years. So currently hard to value, but in time will be a new house.

Originally Posted by Former Lancastrian (Post 10741370)

Where did this understanding originate from. CBSA do not value homes at a Port of Entry.

Originally Posted by Mikeypm (Post 10742187)

But if your not tax resident in the UK how can your UK house be your principal residence?

Originally Posted by Aviator (Post 10742279)

You don't get to choose whether it is your principal residence or not, it is mandated in the tax laws. CRA have information on this on their website. Buying a house is not the only acid test of tax residency, there are many other factors, which would be hard to avoid if living in a country.

The issue you may come up with is, the land and whatever is on it has a value on the day you take up tax residency. Therefore the valuation is 'as is' on the day you become a tax resident of Canada. What is there now, not what might be in a few years.

If you subsequently rebuild and the value goes up, you pay CGT on the difference. You would be better off rebuilding before becoming a tax resident. No different to if you had invested the money in shares rather than rebuilding a house.

If it is an insurance write off, presumably uninhabitable, hard to justify it being a principal residence anyway.

Originally Posted by JonboyE (Post 10742610)

Best: an appraisal by a qualified surveyor. However, a written estimate of market value on an estate agent's letterhead should be good enough.



See above.



See above.



Yes. As Aviator has said, it is up to you to keep records to prove the numbers you put on your tax returns. If you can't, the CRA are at liberty to use what they consider more reasonable. That is why a formal appraisal is best. The CRA would need extraordinary grounds to challenge that.



Most of the time the CRA will accept your return as filed. There is still an assumption of honesty. But why put yourself at unnecessary risk?



For a qualified surveyor it is no harder to value bare land than it is to value land with a house on it.



One of the conditions of a house being a principal residence for Canadian tax purposes is that you or your family lived there for some part of the year. If it is not habitable and/or you were in Canada all year it cannot be your principal residence.

You say you will be in Canada on a TWP so are you planning to return to the UK? Any property you own before you become tax-resident in Canada and still own when you cease to be tax-resident in Canada, IF your time in Canada is less than 60 months, is not subject to Canadian capital gains tax.

Originally Posted by al8565 (Post 10743186)

But surely if you leave Canada after 5 years and then sell you don't owe CRA any tax.

Originally Posted by JonboyE (Post 10743204)

You might. When you become a tax-resident in Canada you are deemed to have sold and repurchased all your capital assets. This means you don't pay tax in Canada on capital gains that occurred when you were tax-resident elsewhere.

When you cease to be tax-resident in Canada you are also deemed to have sold and repurchased your capital assets. Therefore, unless the gain is specifically exempted, you pay tax on the gains that occurred whilst you were tax-resident here.