# Emigrating Canda - Keeping House as a Rental Property?



## Bordo12 (Oct 13, 2010)

I touched on this in another thread, however it is a complicated situation (for me) so I thought it best to start a new one. Scenario: I have owned a house for appox 5 years, in that time the house has appreciated in value by approx $70,000. I am moving oversees (Australia) from Manitoba and have an excellent opportunity to rent my house out for a good return. I will be declaring non-tax residency in Canada when I leave. 

I understand that 25% of my gross rental income will be deducted by the CRA (which I can live with). A bigger issue and question mark for me, is what happens to the Capital Gains I have earned to date on the house (70k). If I were to stay in Canada this would not be an issue but I suspect it may be when I go to sell the house in 5+ years. 

There may be some options I haven't thought about - i.e. Incorporating and selling the house to the Inc., selling the house to a family member with a revenue sharing proviso? All advice is greatly appreciated, thank you in advance!


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## Guban (Jul 5, 2011)

Bordo12 said:


> I touched on this in another thread, however it is a complicated situation (for me) so I thought it best to start a new one. Scenario: I have owned a house for appox 5 years, in that time the house has appreciated in value by approx $70,000. I am moving oversees (Australia) from Manitoba and have an excellent opportunity to rent my house out for a good return. I will be declaring non-tax residency in Canada when I leave.
> 
> I understand that 25% of my gross rental income will be deducted by the CRA (which I can live with). A bigger issue and question mark for me, is what happens to the Capital Gains I have earned to date on the house (70k). If I were to stay in Canada this would not be an issue but I suspect it may be when I go to sell the house in 5+ years.
> 
> There may be some options I haven't thought about - i.e. Incorporating and selling the house to the Inc., selling the house to a family member with a revenue sharing proviso? All advice is greatly appreciated, thank you in advance!


Sounds like there won't be any capital gains taxes if you can use the principal residence exemption.
Also, you don't have to give up 25% of your rent to CRA if you file a section 216 return.
See
http://www.advisor.ca/tax/tax-news/taxation-of-foreign-investments-2375

When you eventually sell the house, capital gains taxes will have to be paid on any appreciation since you left.


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