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Expert: Emma-Lisa Raffo Date: 5/29/2007 Subject: Tax on a former rental
Question Hi we have bought an apartment for 195K. lived in for 2 years and rented it for 1,5 and then moved back in an live more then a year in. Current value is 425K. if we sell it now do pay capital gain tax if it was our primary residence?
Answer Lilia,
When you sell your primary residence, you might be responsible for a capital gain. To be exempt, the property would need to have been your principal residence for every year you owned it. In this case you would not have to report the sale on your tax return. But, since you mentioned that during the period you owned the home it was not your principal residence and was used as rental for the short-term, there may be a chance you may have to report all or part of the capital gain.
I would highly recommend that you contact an accountant in your part of the country who can acertain if you will need to claim gains on the years your home was a rental. For information on capital gains in Canada, browse this great government resource site for the latest information...
