QUOTE (lakeheadteacher @ Feb 12 2010, 03:10 PM) Good evening. My wife and I are both Canadian citizens who live and work oversees. We have good jobs that we love and decided to invest in a pre-construction condo in Toronto. We think that we did our homework and got a good deal at 300K. However, the taxes are killer...and with the HST coming into play before our closing date it gets worse. I`m wondering if anyone knows if we can sell it on the occupancy date as our `primary residence` and pay no capital gains. It would be our only home in Canada and it would be over a year between when we signed up to buy it and the completion date. If it`s a no....we would appreciate any other advice to help out with the tax man!
Kind regards,
C
I am not an accountant, and I cannot comment on the international aspect of your question. However, one thing that you need to realize is that capital gains are payable on properties that are seen as investment properties and are held of an indefinite amount of time. Primary residences are exempt from capital gains. In your particular instance, CRA may deem your transaction as a business transaction in that you held it for a short period of time and then sold it for a profit. An adventure in the nature of trade, if you will and thus a business transaction. CRA will look at your intent and it will be up to you to disprove that your transaction was not a business transaction. I suspect that you would be hard pressed to prove this as a principal residence given that you did not spend any time in it.
Accountants may be able to provide additional insight.
