Asked
I have owned my home since 1998, I used it as a rental from 2011-2023, and moved back in to it Jan 2024...I am told I have to pay capital gains tax for the years it was a rental even though I'm not selling, is this true? And how does that work? Is there a percentage based on my income?
Clint’s answer
Yes, the CRA would like for you to pay capital gains on this property when you sell it.
There are some elections that can be made prior to changing the use of the residence, and if you have done this you may be able to claim it as a principal residence for up to four years while it was a rented property as long as your case fits the criteria.
Won't get too deep into the woods here, but there are definitely some things you may want to have in your records when it comes time to report.
Appraisals are fairly important so you have values to support any claims made upon filing your taxes.
Having filed a form called a 2091 change in use would be a good idea for your 2024 tax filing.
Best to consult an accountant if it's not us to ensure you are complying with laws and not paying any more tax than you are obligated to by the law.
Hope this helps!
January 5, 2025
From Ask Clint: real questions from a Canadian public finance forum, answered by Clint Cole. Names are changed. This is general information, not advice for your situation, and rules and dollar figures may have changed since Clint answered. Terms