Principal Residence 12 months: You can Have Two!

The key words under the Income Tax Act would be “principal residence”. You can actually have two at the same time with a maximum of a 12 month overlap. So buy one and sell your old one in the same year, you don’t pay capital gains taxes on either. You might be able to do this a few times, but at a certain point CRA will take the position that you are actually “in the business” and all your profits will be fully taxable as business income.

Certainly, there were opportunities to have more than one, for a family, if the titles were separate. That was common place from 1972 to 1982, with all the loopholes plugged by 1985. That’s now precluded with a spouse, but still works with children, parents, grandparents and “close” (but, unmarried) relationships.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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