# Can I rent out my primary residence to family?



## moonlighting (Nov 21, 2013)

Hi, would anyone know if I can rent out my primary residence to family such as spouse or adult child?

I have paid off my condo, and can't sell it, and am worried about being hit with a special levy that I can't write off. I also wish to write off the strata fees.

Do I have to live elsewhere if I rent it out to spouse or adult child?


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## Just a Guy (Mar 27, 2012)

You can, the actual question is it legal, and can you write things off...

I really don't understand why people always want to try and bend the rules...my suggestion is if you can't do something that is b&w, you probably shouldn't do it.

My guess would be there would not be any tax advantage to this even if it were allowed, which I don't think it would be.


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## MoneyGal (Apr 24, 2009)

You can rent to anyone but in order to write off costs, you must rent at market rate and have an expectation of profit. 

If you are living there and renting part of the space, still kosher from a tax perspective, but again you must charge market rates and have an expectation of profit (and declare the income and provide receipts).


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## Just a Guy (Mar 27, 2012)

You would also probably be charged partial capital gains even though it's a primary residence, when you sell.

As I said, there probably would be any advantage.


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## Taraz (Nov 24, 2013)

As far as I know, it can't be *both* a rental property and a principal residence at the same time. 

If you make it into a rental property, you would have to rent it at market rates if you rent to your kid (assuming that wouldn't be a problem for the CRA). I don't think you could rent to your spouse.

I don't think you'd come out ahead though. When you change the use, you'd have to pay for an appraisal to establish the property value at that date (which would probably cost about $500). Also, you'd have to claim the rent as income (at market rates), minus expenses of course. Any capital gains on the property wouldn't be tax-exempt from that point onwards, since it would no longer be your principal residence. 

Finally, I'm not sure you could write off the entire amount of the levy at once - I suspect you would have to depreciate it over time. 

Unless you own a second property that you want to move to and designate as your principal residence, it probably wouldn't be worth the hassle to try. 

http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f3/s1-f3-c2-eng.html


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## MoneyGal (Apr 24, 2009)

All y'all are mixing up capital expenses and current expenses. There is no requirement to take a capital deduction against a residence used, in part, as a rental property.


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## MoneyGal (Apr 24, 2009)

(and if no capital cost allowance is taken, the capital gains exemption on a principal residence used in part as a rental property is not at risk)


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