# keeping my house, renting it out and moving out of province.



## summer (Jul 7, 2011)

My spouse may be getting an out of province job transfer.
We moved into a home we love last year.
We have just started weighing our options.

One option is to rent our current home out for a few years while we are out of province. 

A few questions:
I know the rent would be income but I suppose I could write that off against the mortgage, correct?
Then I suppose I would have to pay capital gains from the years that it was a rental (for example the value in 2012 vs what it is when we move back in).

Now, if I am RENTING in another province, I still have to pay all the above and get no credit for renting, correct??


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## stardancer (Apr 26, 2009)

If you rent out the house, you can claim the normal expenses against rental income. See http://www.cra-arc.gc.ca/ebci/cjcm/srch/bscSrch?lang=en&bscSrch=rental+income&cn-search-submit= Go 

Later on, when you sell the house, the rental time period may be subject to capital gains, as the house would not have been your principal residence. However, there is an election you can make- (can't remember the form#) you can designate the house as your principal residence for up to 4 years while you are out of province/country; so, although you must report the rental income, when you do sell the house down the road, you can get 4 more years as a principal residence out of it. This election is handy, when someone gets work out of province or country for a temporary time period.

To be safe, keep track of the fair market value of the place when you leave and when you come back. I am changing the use of my residence and had a realtor give me a letter of opinion as to the value of the house. 

If you claim your rent paid in another province to obtain that province's rental credits/benefits, then you cannot use the election of 4 years for your house. You cannot claim 2 principal residences at the same time.


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## P_I (Dec 2, 2011)

Been there, done that. stardancer has given you a pretty good summary of the taxation side of things. But there is more to consider. 

When your tenants are good and there are no problems to be handled, like appliances breaking down or other 'routine' maintenance, it is easy. When the house sits empty between tenants, and there are still bills to be paid, not so much. Luckily we've never had to deal with bad tenants. 

One other thing that you haven't mentioned, who is going to manage the property in your absence?


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## marina628 (Dec 14, 2010)

I would sell it and write as much as you can off on moving expenses.I think you can write off the legal fees and maybe even real estate fees if you have to sell to relocate.The tax experts here will probably be able to guide you better in this area.


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## summer (Jul 7, 2011)

Thanks to all of you. We have decided not to go ahead with the move. The money is not much more annually (maybe 40 000). It wouldn't be worth it. Uprooting the kids and me quiting my job is just not worth the money.
We just put a pool in and did some backyard work to the tune of $125K and most of that would be lost if we sold the house. We would lose money on the house. 

Marina, that is a good point. We would be able to write off the real estate and legal fees.


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## stardancer (Apr 26, 2009)

marina628 said:


> I would sell it and write as much as you can off on moving expenses.I think you can write off the legal fees and maybe even real estate fees if you have to sell to relocate.The tax experts here will probably be able to guide you better in this area.


You can only use these expenses on the T1M form IF you purchase another house in the new area. It will be disallowed if it's only one way.


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