No, property tax assessment is an approximate and acceptable proxy.
Steps to convert primary residence into rental depends on whether you plan to make any change of use for the residence ie. if you are going to put a suite in it then rent out up and down. In any case, run the financials first using robust market research of rents. What does it look like to sell now vs. take that money and invest in your RRSP's and pay no taxes on the entire principal vs. keep that cash invested and get some cash flow and some expectation of appreciation upside. Run the numbers thoroughly to start.
If numbers say sell, then sell and move on.
If numbers say hold, then you may need a city license but if you are not changing the property in any other way you are probably safe to rent it as is. Think about your exit strategy and when you hope to sell to get your money out. That will help inform you as to what renovations may be worthwhile.
Steps to convert primary residence into rental depends on whether you plan to make any change of use for the residence ie. if you are going to put a suite in it then rent out up and down. In any case, run the financials first using robust market research of rents. What does it look like to sell now vs. take that money and invest in your RRSP's and pay no taxes on the entire principal vs. keep that cash invested and get some cash flow and some expectation of appreciation upside. Run the numbers thoroughly to start.
If numbers say sell, then sell and move on.
If numbers say hold, then you may need a city license but if you are not changing the property in any other way you are probably safe to rent it as is. Think about your exit strategy and when you hope to sell to get your money out. That will help inform you as to what renovations may be worthwhile.
I would not use a property tax assessment. I would rather pay the $250 for a professional appraisal.
A primary residence is exempt from capital gains, so you want to be able to prove the value is as high as possible before converting it to a rental subject to capital gains tax.
Most municipalities assess properties at slightly below full market value in order to avoid as many disputes as possible. Furthermore, tax assessments are only done once a year for the following year, so they may not represent current values. The difference could easily be 10% or more, depending on whether your market is rising, falling, or flat.
Let's assume your house is worth $300k but the tax assessment is 10% low at $270k. You convert the property to a rental assuming a $270k value and later sell the rental for $400k. Instead of being taxed on a $100k gain, you would be taxed on a $130k gain, meaning your would pay taxes on $15k of capital gains income you didn't actually earn and shouldn't be taxed on.
I don't even want to consider the math in a booming market where the tax assessed value could easily be 30% low.
$250 for an appraisal sounds more appealing to me.
A primary residence is exempt from capital gains, so you want to be able to prove the value is as high as possible before converting it to a rental subject to capital gains tax.
Most municipalities assess properties at slightly below full market value in order to avoid as many disputes as possible. Furthermore, tax assessments are only done once a year for the following year, so they may not represent current values. The difference could easily be 10% or more, depending on whether your market is rising, falling, or flat.
Let's assume your house is worth $300k but the tax assessment is 10% low at $270k. You convert the property to a rental assuming a $270k value and later sell the rental for $400k. Instead of being taxed on a $100k gain, you would be taxed on a $130k gain, meaning your would pay taxes on $15k of capital gains income you didn't actually earn and shouldn't be taxed on.
I don't even want to consider the math in a booming market where the tax assessed value could easily be 30% low.
$250 for an appraisal sounds more appealing to me.
