How to tell the taxman you’re selling your home
When selling a home, your taxes are impacted too. The Canada Revenue Agency (CRA) considers a profit on the sale of property to be a capital gain. But, CRA allows for a primary residence, or family home, to be sold at a profit without having to pay capital gains tax. There are caveats of course. There can be only one family home sold per year and the owner must be legal age and documented. Also, there is a list of acceptable domiciles that are considered home. Check with your accountant or CRA to make sure you qualify.
- When you sell your property, any increase in value is known as a capital gain and subject to tax. The amount is based on your marginal tax rate and is charged on only half of the profit earned from selling the property.
- There is a exemption on a family’s primary residence, which means you don’t have to pay any tax (even if you end up earning a profit) on the sale of your family home.
- Whenever you sell your primary residence, CRA requires that you report this sale on your income tax return even though the sale isn’t taxable.
“Canada Revenue Agency (CRA) provides Canadian homeowners with an exemption from taxes owed on the profit made from the sale of your principal residence.”