Capital gain on pre-sale apartment

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Mar 17th, 2022 3:43 am

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Mar 15th, 2022 4:01 pm

tofubb [OP]: Deal Addict; Dec 17, 2009; 1487 posts; 1265 upvotes; Vancouver

Mar 15th, 2022 4:01 pm

Capital gain on pre-sale apartment

I purchased a pre-sale apartment in 2018 for $400K, it is going to complete this year.
Just wonder does it make a difference on capital gain calculation, if I move in now then rent it out, or if I rent it out now then move in.

Case one: $400K, purchased in 2018 —-> $500K, completed and move in 2022 —-> $550K, rent out in 2023 —-> $580K, sold in 2024,

Case two: $400K, purchased in 2018 —-> $500K, completed and rent out in 2022 —-> $550K, move in 2023 —-> $580K, sold in 2024,

4 replies

Mar 15th, 2022 7:28 pm

greg123: Deal Fanatic; Oct 1, 2004; 6651 posts; 993 upvotes; GTA

Mar 15th, 2022 7:28 pm

If your intention was for primary residence and you move in after completion, then rent it out, you pay capital gains based on value the day you started renting it out.

If you rent it out right away, then your ACB is the 2018 purchase price.

+1

Mar 16th, 2022 4:46 pm

ssj4_ootaku: Sr. Member; May 12, 2003; 979 posts; 374 upvotes

Mar 16th, 2022 4:46 pm

Case one!
You get principal residence (if you don't claim another place) for possibly the ENTIRE ownership period.
No HST implications

+1

Mar 16th, 2022 4:57 pm

spike1128: Deal Guru; Oct 7, 2010; 14085 posts; 4747 upvotes

Mar 16th, 2022 4:57 pm

There is no way around it unless you live there for the minimum amount of time required. CRA will F you up and take all your money.

Mar 17th, 2022 3:43 am

tofubb [OP]: Deal Addict; Dec 17, 2009; 1487 posts; 1265 upvotes; Vancouver

Mar 17th, 2022 3:43 am

I don’t own any property now and it will be my only property. The developer offers rental service with guarantee rental income for the first two years, so at the beginning , I am thinking to rent it out first, then move in later. But seem like it is not a good idea, will pay much more tax.

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