# Holding two homes simultaneously - tax trouble?



## yyzvoyageur (Apr 10, 2009)

Please clarify something for me. A family member is looking to sell his home and buy a condominium. If he buys a condo before selling his house and owns both properties simultaneously for a couple of months will he run into any tax problems? Neither property will be rented out and neither will be mortgaged.


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## marina628 (Dec 14, 2010)

no problem at all , i had my last home for 4 months after i closed on my new principle residence.It was sold but we had to give a late closing as the buyer had some surgery coming up and knew they could not close sooner.


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## I'm Howard (Oct 13, 2010)

Why not make the sale conditional on selling the Home?


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## yyzvoyageur (Apr 10, 2009)

I'm Howard said:


> Why not make the sale conditional on selling the Home?


It's a new development so I don't believe they would accept such a contingency. Besides he's not overly concerned about selling. His house is in a good neighbourhood and it's well-maintained. He just wants to be able to transition into the new place without having to move everything in one afternoon.

My wife and I actually did something similar when we moved (i.e., holding two properties simultaneously for a while). We didn't experience any problems but I just wanted to make sure I wasn't missing anything.


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## sags (May 15, 2010)

This is from the CRA website:

_*More Than One Residence in a Taxation Year*¶ 10.

While only one property may be designated as a taxpayer's principal residence for a particular taxation year (see ¶ 6), the principal residence exemption rules recognize that the taxpayer can have two residences in the same year, i.e., where one residence is sold and another acquired in the same year. The effect of the "one plus" in variable B (the numerator of the fraction) in the formula in ¶ 8 is to treat both properties as a principal residence in such a year, even though only one of them may be designated as such for that year._

It seems to indicate the purchase of the new property, and the sale of the old property have to be completed within the same taxation year.

It doesn't say what happens if a sale carries over into another year.


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## kcowan (Jul 1, 2010)

I think you just claim the old house as a PR when it is sold. That was its only use while you owned it. I wonder how long you could drag it out?

(In Vancouver, it might generate several 10k extra by dragging out the period before you list it!)


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