Question: Pre-Development as Principle Residence Capital Gains?

No cap gains as long as it is your principal residence. Whether you bought it precon or resale doesn't matter, if that's what you're wondering about. You don't own the place until you close and that's day 1.

Jon Lai wrote: ↑ No cap gains as long as it is your principal residence. Whether you bought it precon or resale doesn't matter, if that's what you're wondering about. You don't own the place until you close and that's day 1.

This.

And the reason for this is you haven't actually bought anything yet, so there's nothing to tax. You have merely entered a contract and put a deposit down for a condo that may or may not ever be built. It likely will, but with how much prices have gone up and building costs gone up a lot of developers are doing some shady things. The date you own it starts from the date of closing.

https://www.cbc.ca/news/canada/toronto/ ... -1.5947613

Thank you everybody. Ya I was little confused, but seems to basically be simple as signing a contract to buy a residence at a specific price when it closes. I also can see how this can be used strategically as you can own a primary residence, sell it in 5 years and get free cap gains, and then move into pre-development. Of course this depends on housing prices going up.

If you bought a pre-construction as a primary residence but then you re-assign (i.e. an assignment) the property to someone else, then you could be hit with capital gains if CRA ever finds out. I assume you currently live somewhere where it is your primary residence. I know people who have done the above over the past few years. All depends on whether the builder has provided that information to CRA as part of a registered sale. There is a potential that the gains you made before actually closing would be considered capital gains.