When you decide to rent out your principal residency, things you need to know.
Your home is apartment, house, condo, cottage and cabin are personal property.
Your home will become your rental property?
This means you will required to report your rental income if you rent more than 50% of the Personal Property changes to Real Property which is taxable.
Why is this taxable?
In the year change of use on your Personal Property it is deemed to be SOLD, when your property is rented out. In the year(s) you change the use of Real Property you will pay capital gains on the Rental Property, if you do not use it as your principal residency.
Does this apply to your foreign real property?
Yes, all depending on the country your property is located, you need to declare the rental income on your Canada taxes, if you take up resident in Canada.
Need to know about foreign taxes on selling your foreign property is not your principal resident, if the other country has a tax treaty with Canada. Then you will not be double taxed. The foreign tax you pay with work as a credit in Canada.
Are you deciding on selling your home – did not live in during the year? You will be required to pay capital gains on the selling Real Property.
Need help? Tax Planning Rental Income.
We can help you understand the rules about change the status of your resident to income. The capital gains on selling on your personal or real property.
Keep in mind that your financial institutional can help you will the forms on some foreign income, such as your pensions.
For more information – or to get your tax return done for you – contact Ina.