My question is: Canadian-specific
QUESTION: My family purchased a house in Vancouver March 23rd 2004, it has
been a little over a year. The property values have gone up since we
purchased, we would like to sell and purchase another house. Would we be
charged capital gains, since we have only owned the house for just over a
year, and a profit would be made. Reason for wanting to sell, is a
neighbour that complains about my two miniature poodles and the noise my two
young boys make, the odd time that they do play in the yard. He has made
advances to my nanny and she is uncomfortable going out in the yard when he
is home. We love the house, and the area but I myself cringe everytime I see
him. My boyfriend said to just ignore him but I am not comfortable living
with the stress. The house I would like to buy is less money, a much larger
lot, with neighours that like children and dogs. So in a nut shell, this is
our first home, would we be charged capital gains tax and if so, what
percentaged would we be looking at. We would be selling the house by owner.
We bought the house for $353000,(accessed at $288000) and would be selling
it at $430000 (accessed at $366000.
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david ingram replies:
No time to answer but the following questions will help.
My question is: Canadian-specific
QUESTION: I recently purchased and live in a condo. I have
only been in here for a month and a half. If I sale
and make a gain, do I have to pay capital gains
tax. How long to I have to reside before I do not
have to pay the taxes
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david ingram replies:
No time to answer this specifically so am answering it with an old reply.
My question is: Canadian-specific
QUESTION: If I bought and moved into a house and decide 6 months later that
I don't like it and sell that house to move elsewhere do I attract capital
gains on the sale of my home?
=================================
david ingram replies:
And how high is up?
If you bought a house to resell any profit is taxable at ordinary income
rates unless you can get it into another category.
If you bought a house or cabin to rent or use as a second home and decide
ten years later to sell it for some reason or other, it is likely a capital
gain.
If you buy a house and decide to sell it in six months, you can expect that
the CRA "might" try and tax you at full rates unless you can show that the
house was truly your principal residence and that you sold it for reasons
other than making a profit.
reasons might be:
1. You lost your job
2. The school your child goes to is just not any good
3. You cannot stand your neighbour
4. You get divorced
5. you are transferred to another city
6. You are pregnant and need a bigger house
7. My favourite was a couple who ended up in a battle with organized
druggies and sold out in fear of their lives.
However, if you bought a fixer upper and fix it up and sell it and buy
another fixer upper around the corner and your kids keep on going to the
same school and you shop at the same stores and catch the same bus, etc.,
you will be paying straight tax.
The US is different. In Canada it is "all" tax free as a principal
residence or taxable. In the USA, you have to have lived in the home for 2
out of the last five years to claim up to $250,000 tax free per person. If
you sell before the 24 months is up for a good reason - death of a spouse
job transfer, job loss, etc. - then you can prorate the $250,000 by
multiplying $250,000 by the number of months you were in it divided by 24
(12 months would be $125,000 for instance).
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