Real Estate

How long must you live in a residence to consider it your principal residence to avoid captial gain taxes on selling?

  • Last Updated:
  • Apr 14th, 2020 1:46 pm
[OP]
Deal Fanatic
Jul 7, 2004
5745 posts
1415 upvotes

How long must you live in a residence to consider it your principal residence to avoid captial gain taxes on selling?

I'm looking at buying/building a cabin and possibly flipping it if the offer comes up within a year. Is there any exact time you have to stay at the residence before you can sell it where it wouldn't be considered your principal residence? I can't imagine CRA would let you do it regularly?
6 replies
Sr. Member
Feb 19, 2019
744 posts
773 upvotes
Stouffville ON
There is no set time, there are many factors that will come into play in determining if this is a principal residence or not, the intent is the main one, frequency of transactions is another, since your intent is to flip, the property is not your principal residence and it will likely be taxed as business income.
Full Time and Full Service Realtor
Deal Addict
Jul 3, 2007
2471 posts
2562 upvotes
Toronto
baz5 wrote: I'm looking at buying/building a cabin and possibly flipping it if the offer comes up within a year. Is there any exact time you have to stay at the residence before you can sell it where it wouldn't be considered your principal residence? I can't imagine CRA would let you do it regularly?
this is getting more difficult now , hence why the CRA started asking for sale info on your T1 filing last year....
[OP]
Deal Fanatic
Jul 7, 2004
5745 posts
1415 upvotes
senasena wrote: There is no set time, there are many factors that will come into play in determining if this is a principal residence or not, the intent is the main one, frequency of transactions is another, since your intent is to flip, the property is not your principal residence and it will likely be taxed as business income.
joepipe wrote: this is getting more difficult now , hence why the CRA started asking for sale info on your T1 filing last year....
I guess just try but expect it not to work?
Deal Addict
Jul 3, 2007
2471 posts
2562 upvotes
Toronto
baz5 wrote: I guess just try but expect it not to work?
its a gamble....be prepared to pay
Deal Fanatic
Jul 3, 2011
5733 posts
2904 upvotes
Thornhill
baz5 wrote: I'm looking at buying/building a cabin and possibly flipping it if the offer comes up within a year. Is there any exact time you have to stay at the residence before you can sell it where it wouldn't be considered your principal residence? I can't imagine CRA would let you do it regularly?
If you already have a principal residence doing what you want to do is likely to end up being less lucrative than you're hoping to achieve.

And, if the cabin would be your only property, the odds of it escaping tax at the income level is slim and next to none.
Deal Fanatic
Feb 9, 2009
9086 posts
6597 upvotes
If the cabin is your only place you may get away with it (after all the CRA cannot tell you how long to live in a pres residence and is grey area, you could win the argument).

If its not yes cra will determine it to be a flip and you'll pay income on it.

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