# Principle residence/ Capital gains



## faline (Feb 10, 2011)

Hi everyone,
This info is so hard to find:

I am currently renting out my condo. If I move back in within the 5 year period of moving out I avoid the Capital Gains tax.

What Im wondering is: how long I have to keep living there before I can move out and rent it out again?

Or is it 5 years total? (and not necessarily 5 consecutive years?)

thanks for any info!

Faline


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## AltaRed (Jun 8, 2009)

This has been addressed in other threads. In Canada, for the entire time the unit is NOT a principal residence, capital gains (or losses) accrue and must be paid when the title changes hands (e.g. sold). In other words, you have to know the Fair Market Value of the condo on the date you rented it out, obtain another FMV when you move back in to declare it a principal residence, and the difference will be the cap gains (or losses) you have to declare when you sell. CRA generally requires that FMW be established through a qualified/certified appraiser but might consider municipal tax assessment values if no appraisal exists. Realtor estimates do not count.

There is no free lunch on avoiding cap gains taxes. Where did you obtain your 5 year idea?


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## faline (Feb 10, 2011)

I've read that you can declare a home your principle residence for 4+1 years if it was your principle residence but then move out and rent it out. (and not declare any new home as principle residence)

I'm wondering if that is a one-shot deal, or if I can move back in for a while and then rent it out again and declare it my principle residence for another 4+1 years at some point down the line.


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## P_I (Dec 2, 2011)

CRA has pretty complete coverage of the topic, Principal residence and other real estate. The change of use information is covered in Changing all your principal residence to a rental or business property and it mentions a *four year limit*, than can be extended under specific conditions.


CRA said:


> While your election is in effect, you can designate the property as your principal residence for up to four years, even if you do not use your property as your principal residence. However, you can only do this if you do not designate any other property as your principal residence for this time.
> 
> You can extend the four year limit indefinitely if all of the following conditions are met:
> 
> ...


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## Spudd (Oct 11, 2011)

So are you currently renting somewhere else to live? If you own wherever you live now, then you lose the principle residence status on one of the homes.


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## faline (Feb 10, 2011)

thanks very much for taking the time to response. I had read the list of ways to extend the 4 years previously. What I am wondering is if I move back in to the house for a while, and then move out again... whether that be in one year or 20 years... If I can re-start the 4 years of renting it out while still claiming it my primary residence.

Yes, I'm currently renting somewhere else. I have not claimed principle residence anywhere else. I am only 3 years outside my principle residence and trying to plan the future.

thanks again


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