My question is: Canadian-specific QUESTION: I would like to sell one revenue property in Langley and use the funds to purchase a larger, more expensive one right away. My question is, do I have to pay Capital Gains on the sale or since I am going to directly purchase another revenue property, does the capital gains tax not apply? Thanks very much. --------------------------------------------------------------------------- david ingram replies: Canada does not have a rollover provision as the US does with its 1031 like for like property exchange provisions. There is an exception in Canada of course, but to fit into the exception, your first property has to be expropriated by a government authority for the public good, something like a parking lot for the Toronto Public Library would qualify. Sometimes, Canadians get caught in a bind when they want to sell a property they own in the US. the local realtor will tell them they can re-invest in another property and roll over the profit so they spend a thousand or two for the paperwork and service and they find out that they owe tax to Canada anyway. The other disaster is when an American sells his US property because he wants to invest in Whistler or Toronto or Peggy's cove. He or she makes the switch and spends all their money and then finds that an exchange out of the country does not work for US purposes. Anyway, you will owe the tax on the property you sell so make allowances fro it in your cash flow when buying the second property. Another hint is to take ALL of the money from the sale and pay down any non-deductible mortgage on your personal residence. THEN Use your now paid for house as security for a loan for the down payment on the new property... VOILA!!! You now have a tax deductible mortgage in Canada. 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