Real Estate

Captital gains on rental property only property i own !?

  • Last Updated:
  • Jan 15th, 2021 12:28 pm
[OP]
Member
May 27, 2013
447 posts
28 upvotes

Captital gains on rental property only property i own !?

Is there capital gains or hst on a sale of a rental property. It is the only property/house owned by the owner they do not live there, they live elsewhere.
8 replies
Deal Guru
Feb 22, 2011
10176 posts
12596 upvotes
Toronto
Did you ever live there? If so what was the break down of time living there vs rented out.
[OP]
Member
May 27, 2013
447 posts
28 upvotes
mazerbeaner wrote: Did you ever live there? If so what was the break down of time living there vs rented out.
Its a duplex .
2020 one floor was vacant for 3 months.
2018 one floor 4 months vacant and the other 2 months vacant
Problem is they never changed their address on their license to that property of that matters.
Deal Guru
Feb 22, 2011
10176 posts
12596 upvotes
Toronto
wantboost1 wrote: Its a duplex .
2020 one floor was vacant for 3 months.
2018 one floor 4 months vacant and the other 2 months vacant
Problem is they never changed their address on their license to that property of that matters.
You should use an accountant who has experience with RE. From what I understand you can only claim it as your primary residence if you did live there part of the year. Though I think there are some exceptions like if you had to move for work. For a duplex I think it has to be proportional to the part used as a rental, here is an example;

https://www.canada.ca/en/revenue-agency ... ncome.html
[OP]
Member
May 27, 2013
447 posts
28 upvotes
What are the consequences if u don't report this
Sr. Member
Oct 11, 2016
592 posts
216 upvotes
You're looking at massive fines and penalties. You'll be red flagged for life. Almost any future real estate transaction will be under a microscope. Don't play with fire. Hire an accountant and do the right thing.

If the owner lived there, then there is no issue. However, if you do not live there, its a very grey area. Hire an accountant and get professional advice.
Sr. Member
Oct 11, 2016
592 posts
216 upvotes
mazerbeaner wrote: You should use an accountant who has experience with RE. From what I understand you can only claim it as your primary residence if you did live there part of the year. Though I think there are some exceptions like if you had to move for work. For a duplex I think it has to be proportional to the part used as a rental, here is an example;

https://www.canada.ca/en/revenue-agency ... ncome.html
+100
Deal Addict
Nov 23, 2003
2053 posts
526 upvotes
wantboost1 wrote: What are the consequences if u don't report this
Don’t even think about it.
Deal Guru
Feb 22, 2011
10176 posts
12596 upvotes
Toronto
wantboost1 wrote: What are the consequences if u don't report this
Getting audited and flagged for future audits, penalties and interest on taxes owed.

It's not that bad. Capital gains tax is only on half the gain and even then it's added to income and at your bracket. You can largely offset it by maxing out RRSP if you haven't done so already.

If it's a duplex you lived in it would only ~1/4 of the profit would be taxed.

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