# capital gains question looking for info



## caru_68 (Jan 23, 2013)

We are planning to move into our rental property which we have owned and rented for approx 7 years. We would like to build a new home. How long do you have to live in your 
rental property to avoid paying capital gains?


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## Eclectic12 (Oct 20, 2010)

This is probably better in the Taxation section ... but my understanding is that you can't avoid the capital gains from the period it was rented out.

http://www.taxtips.ca/personaltax/propertyrental/changeinuse.htm
http://www.joycebyrnerealtor.com/content.aspx?pid=1041&cid=1001

Then too, this link says moving into the rental triggers a deemed disposition and capital gains.


> Caution: Certain other actions can also trigger a deemed disposition. For example, if you move into a property that you were previously renting out, then this "change of use" triggers a disposition, and the gain on the rental property becomes taxable, just as if you had sold it at the current fair market value. (There is also a deemed disposition if you change your principal residence into a rental property, but you can use this one to your advantage, by raising the ACB to current FMV.)


http://www.winnipegfreepress.com/business/avoid-capital-gains-pitfalls-headaches-172781851.html


It sounds like you should talk to a tax professional before taking any actions.


Cheers


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## Cal (Jun 17, 2009)

Tha'ts how I understand it too. ^

You can move into the rental, but need an appraisal from date of move in, to show the difference in values from purchase, to move in time.

Best to go over your personal details with an accountant.


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## Eclectic12 (Oct 20, 2010)

At the end of the day, the gov't wants their slice for when it was an income producing property. The best one can do is to have researched in advance and taken the necessary steps to keep the taxes paid to what is legitimately owed.

That said ... I wouldn't cry a river over paying capital gains taxes - they are the cheapest taxes to pay.


Cheers


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## OurBigFatWallet (Jan 20, 2014)

CRA calls this a 'Change of use' when you move into the rental. Assuming you rented it as soon as you originally purchased it, gain would be the difference between the ACB (adjusted cost base) and the value when you move into it. The taxes can't be avoided (assuming the value has increased)


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## Westerly (Dec 26, 2010)

Note though that the gain is reported in the year the property is actually sold (or deemed sold in the event of death of the individual or the last remaining spouse if married.)


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## AltaRed (Jun 8, 2009)

Westerly said:


> Note though that the gain is reported in the year the property is actually sold (or deemed sold in the event of death of the individual or the last remaining spouse if married.)


Meaning the cap gains taxes are not paid until the property is sold.


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