5 Ways To Lower Capital Gains Tax On The Sale Of Your Rental Property

Рет қаралды 19,846

2 жыл бұрын

We’ve been talking about capital gains tax on the sale of your rental property…
Last week, I showed you how to calculate capital gain tax with examples, so you can avoid paying unnecessary taxes on property sales. Watch HERE: • Video
In today’s video, I’ll share 5 ways to reduce rental tax as well as pitfalls to avoid, so you stay on the right side of CRA.
If you have any questions or thoughts after watching this video, leave a comment below, and I’ll respond as soon as possible.
#RealEstateTaxTips #RealEstateInvestors #CanadianInvesting #realestateinvesting #capitagaintax #rentaltax #taxsavingstrategies #CRA
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Tax planning is a personalized decision and will depend on your situation, priorities, and risk tolerance. Consult with your own legal and tax advisors to ensure you get the advice you personalized for you.
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Пікірлер: 48

@maxd2491 4 ай бұрын

Great info. Thanks for posting

@RealEstateTaxTips 4 ай бұрын

Glad you find it helpful

@aarongordon711 4 ай бұрын

This was a great video but im looking for an explanation on claiming a Terminal loss on a property and how it works on taxes. Do you have a video on that I tried to search your profile but I couldnt find anything.

@user-bx2sz5hb8n 7 ай бұрын

Thank you so much valuable information ❤

@RealEstateTaxTips 7 ай бұрын

Glad it was helpful!

@alfredallenspach84 6 ай бұрын

Good morning - we sold our condo unit here in Alberta - while we were renting out our unit, we needed to pay "special assessments" for the up keep of the building (the condo has 33 units) - are these special assessments considered, "capital improvements made over the years of ownership"? Thank you.

@dearjohnkim Жыл бұрын

Hi Cherry, I find your videos very informative and hope to work with you in the future. I have two questions. If I am only renting, and buy a rental property, can I assign the rental property as my principal residence to avoid capital gain tax even though I wouldn’t live there? Secondly, would there be any tax implication to invest in ON if I live in BC? Thank you very much in advance!

@RealEstateTaxTips Жыл бұрын

There are options available if you are renting out the only property you own, but often it would end up with you living in the property for a period of time as your primary residence. Be sure to sit down with our team to have a proper consultation before your implement it and understand your option. I believe in investing locally. Having said that, tax implication can be different if you own your property via a corporation out of province. If you own it in your personal name, tax implication is minimal.

@ribs52 2 жыл бұрын

Hi Cherry. Love your videos. Learned a lot so far. Question on the last one u said about lowering capital gains. For the past 5-7 years my account has put the rental property’s on my wife which has alway had lower income then me. Usually under 30k. I had a sale of one rental and refianced another to repair my rentals. Was wondering I saw that u can only claim up to 25000 per year But I have spent about 50000 in total in repairs, What do u suggest

@RealEstateTaxTips 2 жыл бұрын

Hi Rick, Thanks for reaching out! I'm glad you find them helpful. For any questions or consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca

@kzak2195 Жыл бұрын

Hi Cherry, love your videos, my question is the following; i own rental properties and know that if I purchase new appliances for my tenants I can write of these appliances as class 8 for CCA purposes, however, do I add the purchase of these appliances to my ACB as well while property is rented? How about if I purchase a new bathroom vanity for my tenants, is it same rule? Thank you in advance.

@RealEstateTaxTips Жыл бұрын

You can only do one of the two in relation to the appliances, I typically recommend capitalizing so you get the annual deduction. The Vanity is more difficult as you need to ask why are you replacing the vanity, if it was dated and you were replacing it to update the bathroom then it would be considered a capital item and added to the ACB. If it was damaged for some reason and needed replacing then it "may" be considered a repair, there are some considerations to take into account if you go this route, otherwise it may be considered an upgrade. I recommend you book a meeting with my team to review your question(s) in more depth.

@nofavors 3 ай бұрын

What if the primary residence is rented out? How can the capital gains be saved on that? Can the owner move back in before sale?

@SusanJanzen 2 жыл бұрын

As a Realtor in Edmonton, I don't charge HST. Does your advice change depending on your province?

@RealEstateTaxTips 2 жыл бұрын

Absolutely.

@retrospecial 5 ай бұрын

Thanks for the informative video. What if we bought a condo for 500 K, lived in it for 6 years and then re-financed to buy a new primary property. We rented it for 5 years, but with the upcoming mortgage renewal we want to sell it. Now is our Capital gains basis from the time we originally bought the property 500 K? Or the year we re-financed and made it our rental property approx valuation 900K? We will be lucky to get 850K for it now.

@RealEstateTaxTips 4 ай бұрын

Depending on your particular situation and whether an election is filed, you might need to take an average approach or a valuation approach. Be sure to consult with your accountant that knows your situation to get the appropriate advice.

@andreydavidenko3212 Жыл бұрын

Please tell me if you know about it. I live in Canada for half a year and plan to invest for 10 years and save ETF funds, not to sell, only to save and collect, then I plan to go to another country where there is no capital gain tax, for six months or more (in order to change tax residence) and already in this country to sell assets and take the money to another country is it possible?

@RealEstateTaxTips Жыл бұрын

Haha, such an interesting approach. :) You're still required to pay withholding tax on your gains when you leave Canada as a resident. When you're non-resident owning securities through a Canadian brokerage house, you would still be liable for some non-resident taxes. I suppose you can sell y our asset and purchase the same asset using a different country's brokerage hypothetically...

@dp-hl8zm Жыл бұрын

Hi Cherry, I have claimed the legal fees, real estate fees and capital improvements on the Statement of Real Estate Rentals whenever they have incurred, and these have reduced the net income on each rental property. My question is : when I go to sell can I add these previously claimed expenses to my ACB? Thanks.

@RealEstateTaxTips Жыл бұрын

Legal fees, real estate fees and capital improvements are all capitalized items, and technically cannot be offset against the net income on each rental property. Be sure to speak to your accountant, or someone who knows your situation when you claim these "expenses".

@dp-hl8zm Жыл бұрын

@@RealEstateTaxTips Thanks for your reply. Okay, I did not know that. Legal fees, real estate fees and capital improvements can normally be included to maximize ACB, correct?

@bonnieleung5630 2 жыл бұрын

Hi Cherry, do you or your company provide consultation for investors in BC?

@RealEstateTaxTips 2 жыл бұрын

Hi Bonnie. Thanks for reaching out! Yes, we do. For any questions or consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca 😊

@suemulligan3219 Жыл бұрын

Is it possible not to claim the yearly 4 percent capital cost allowance, I will then have no accumulated depreciation to recap. At the time of sale with the capital gain and to recap of accumulated CCA, the tax bill will be large.

@RealEstateTaxTips Жыл бұрын

Sure, it's an optional deferral you can claim. You don't need to claim it if you don't want to

@jannied9123 Жыл бұрын

If I move back into a multi unit rental that has 2 apartments and I am still renting 1 apartment, do I pay capital gains and recapture on the full property or half the property.

@RealEstateTaxTips Жыл бұрын

Primary residence is an annual designation - there are some tax planning around it to lower your taxes but it really goes back to your specific situation. To qualify for primary residence exemption, you must live in the property during that particular year that you assign primary residence exemption to.

@jannied9123 Жыл бұрын

Thank you for your reply. After watching your video it says that you must pay capital gains and recapture if you have been using the CCA which I have. My question is , if I am only moving into half of the property as my principal residence do I have to pay the capital gain and full recapture on only half because I am only using half the property and the other half will remain rented to a tenant.

@RealEstateTaxTips Жыл бұрын

@@jannied9123 thanks for your question - you have a very specific question and without digging deeper to do more research, it would be difficult to share a specific answer. I encourage you to speak to someone who knows this area of tax and have a proper consultation so you know for sure what the tax implication would be.

@neerajsharma7860 Жыл бұрын

Hi Cherry just to clarify never claimed depreciation on that property

@RealEstateTaxTips Жыл бұрын

I responded.

@patriciagarzon640 Жыл бұрын

I bought a second house and this one is my principal residence. What I have to do in order to become my first residence as a rental residence.

@RealEstateTaxTips Жыл бұрын

You would need to file a change of use on your previous principal residence, I recommend that you consult our team to advise you on more of the details and provide you the guidance you require

@careymeaway2024 Жыл бұрын

what if you sell your rental apartment building and always had an apartment in that building as primary residence; how does this affect capital taxes when selling?

@RealEstateTaxTips Жыл бұрын

Without getting too much information, it sounds like you could potentially shelter a portion of the capital gain as your primary residence. Make sure you consult with someone who is familiar with your situation. If you don't have an accountant you are currently working with, we're more than happy to do help you out.

@careymeaway2024 Жыл бұрын

@@RealEstateTaxTips i heard that any apartment as primary residence within more than a duplex, does not qualify for any shelter? i hope that's wrong.. thanks for answering... also as a senior, are there any shelters if purchasing just a house after selling the apartment building (with one unit being primary residence)?

@RealEstateTaxTips Жыл бұрын

@@careymeaway2024 you can only shelter the space that you are using...not the rest of the building.

@careymeaway2024 Жыл бұрын

@@RealEstateTaxTips again, thanks so much for your answer... so no breaks for seniors who want to retire? and what about inflation?

@michaelmorris2623 2 жыл бұрын

Hey, how's it going. I have a question - I want to buy a place and turn around and sell it and make some money. I make 80k per year and my wife make 0. Should I put the house in her name to save capital gains tax?1

@RealEstateTaxTips 2 жыл бұрын

Hi Michael, Thanks for reaching out! For any questions or consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca

@beebo7782 Жыл бұрын

It is considered flipping and that is business income so 100 percent taxable-not capital gains.

@lanto9920 Жыл бұрын

Hi are you are Accouting ?

@RealEstateTaxTips Жыл бұрын

Not sure if I get your question but yes, I'm a CPA

@neerajsharma7860 Жыл бұрын

Hi I have a condo for which I chose as principal residence u/s 45(2) . I gave that on rent and it has been 3.5 years. Please clarify what happens if I continue to rent that out even after 4 years. If I sell in 5th year what will be treatment of capital gain. Will that be exempt or taxable ?

@RealEstateTaxTips Жыл бұрын

Future gain would be taxable upon sale.

@riasat001 10 ай бұрын

Dear Cherry, I really enjoy your videos. I am looking for real estate tax saving tips. I have send an email to your office. Hope to speak to you soon.