Buying A Primary Residence, Then Moving Out

[arroy]

I just bought my first primary residence, I have lived in it for 4 months. I plan on buying another place and renting the one out that I currently live in. Are there any laws or restrictions preventing me from doing this? Would anything prevent me from doin this say every 6 months?

I know on my contract I signed it as the house being my primary residence. How long does this last?

 

[invst4profit]

Your mortgage company may have something to say about it. Ask them first.

 

[matt]

QUOTE (arroy @ Jul 18 2008, 01:26 PM) I just bought my first primary residence, I have lived in it for 4 months. I plan on buying another place and renting the one out that I currently live in. Are there any laws or restrictions preventing me from doing this? Would anything prevent me from doin this say every 6 months?

I know on my contract I signed it as the house being my primary residence. How long does this last?


No, but if I remember correctly it is all in your intent when it come to tax time. This would most likely be seen as someone flipping by the CRA unless you can prove otherwise.

 

[stocdavw]

Your question does not specify if you are using insured mortgages. If, for some reason, your circumstances have changed and you need to move out of your primary residence, no one will force you to sell it. If you have a CMHC insured mortgage, you may be required to re finance with a conventional mortgage. However, if your intention is to purchase a property with an insured mortgage, live in it for a few months, and then turn it into an investment property, you may be comitting fraud. If you are prosecuted, the penalties are steep. If you are not prosecuted, you will lose a great deal of sleep. Either way, it`s not worth it. It is way too easy to make a fortune in this business without breaking any laws.
You must read the contract you signed, or have your lawyer review it with you. It will answer all of your questions.

 

[mcgregok]

QUOTE (arroy @ Jul 18 2008, 01:26 PM) I just bought my first primary residence, I have lived in it for 4 months. I plan on buying another place and renting the one out that I currently live in. Are there any laws or restrictions preventing me from doing this? Would anything prevent me from doin this say every 6 months?

I know on my contract I signed it as the house being my primary residence. How long does this last?


If you are suggesting buying another primary residence every 6 months call your mortgage underwriter and outline your plan and goals and listen to what they have to say. I `m sure they have heard this question before!

 

[tamrahunt]

You must also consider the tax implications. You may only have ONE primary residence at a time, and the taxation rates are different. Capital gains will not be available to you, as you are now `in the business` as well. The income gained could be added to your taxable income, and therefore taxed as such. An accountant can assist you with some of these implications.

Good luck.