Posted on: 17-09-05 11:04:48
I would like to know if I buy a house now and sell it within 2 years do I attract capital gain tax? Is there a difference.... if I move out of the canada for a new job etc .. do I still have to pay capital gain?
If primary residence then no tax. If you are able to sell privately then all is all your gain. If you are selling thru an agent then you have to shell out 5% commission + recondioning costs to able to sell it which could mean selling at loss if the appreciation is not the same in two years
Quote:
Orginally posted by Sakt
I would like to know if I buy a house now and sell it within 2 years do I attract capital gain tax? Is there a difference.... if I move out of the canada for a new job etc .. do I still have to pay capital gain?
I remember a agent saying sometime ago -- Before buying , if you have any intentions of selling the house within 5 years , then it would be not worth it. ( Unless of course you are very lucky and in a appreciating market )
Currently the market has peaked and is flattening. If you buy now ( at high prices ) then do not expect much appreciation to cover the costs involved in selling. ALso another important point - Selling is also not easy.
So if you but a house then keep in mind a frame of 4 to 5 years before selling it. THis is just my advice and individual opinions will vary..
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Non illigitamus carborundum
Hi,
I believe that we have drifted from answering the original question from Sakt. In regards to Capital gains, if the home you sell is principal residence, there would be no capital gains. However, if part of the house was used to receive some earnings to the owners, this may attract proportional Capital Gains to the extent the home was used to generate income. This would apply if you were renting part of your home (like basement) and receiving income (that you declared and also offset the proportionate mortgage interest payments against your income in your tax returns). Use of part of your home as Home office, though generates income, in most cases would not attract Capital Gains. It is strongly recommended that you seek help from a Tax Professional for tax liabilities.
Coming to comments from others as to whether you will gain or lose in selling your house, I would say it all depends on market conditions. I don't believe that anyone (with the exception of Ajmeri Baba) has a crystal ball to predict gains/losses . Real Estate investment is no different from any other investment (RRSP, Mutual Funds, Bonds, Stocks...). However, Real Estate market has been more stable than any other, except for 'bubble burst' that occured 10 years ago. Leading economists have time and again stated that Toronto (& neighbourhood) prices are in tune with the economic conditions and getting out of reach of common man, and that this trend in price rise will continue. There are still no signs of market flattening as last month (August) beat all records in MLS sales. National Post a couple of weeks cited a report stating that Condominium prices in the next three years are set to see an increase.
All investments come with a risk and it is true that it will cost you to sell your house. Gain or loss will be determined by how much of equity you had in the property. If you are able to receive all your equity back after two years after all costs, you may perhaps still be a gainer as you would still be otherwise paying rent for the period that you now lived in your own home which is non-recoverable.
In the end, do you own homework and seek advice of professionals, but don't let them make the decisions for you.
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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK
Thanks all for the reply!
But can anyone tell ..... among detached, semi- detached, condos and townhomes which have greater resale value nowadays? Can't seem to decide on that!
Hi Sakt,
It is difficult to generalize which kind of home will have a greater resale value. There are several factors affect the price of a dwelling and LOCATION is the key factor. Thereafter, size, layout, builder, age of house, it upkeep, exterior, parking, neighbourhood, accessability etc all add up to it. In one area semis may have a better return than detached while in another condo townhome would give a higher yeild. so unless you have made up your mind on the area, it would be a tough task (not impossible) for any REALTOR to answer your question.
If you have already chosen the area, I may be able to give you a better response. Please bear in mind that the response will be from the data made available to us by Toronto Real Estate Board and may not be indicative of future trends.
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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK
