Moving into an investment property as a home

[TangoWhiskey]

If we moved every two or three years into a home or duplex that had been renovated so as to claim the principal residence exemption on the new property, what are the steps necessary to turn the old residence into an investment property while keeping it in our personal ownership and avoid paying tax? Would we need to do an appraisal of the old home at the time of moving into the new property? Would the move out of the old home be considered a taxable event?



Thanks

 

[Thomas Beyer]

An appraisal is suggested, but not required. You need to be able to show that you have an investment property that was worth X when it became one not only when you sell it eventually, but also in your first year of tax filing as you will usually claim CCA ( aka depreciation) to offset any taxable net rental income. An appraisal, or at the very least a realtor's opinion of value or believable comps.



The sale of your personal residence is usually not reported on your tax filing and as such not taxable.