buyers, buying, canada, canada revenue agency, capital gains, city, cosmopolitan, elana hearse, flipping, greater toronto area, income, investment, mortgage, property, real estate, real estate agent, realtor, sellers, selling, taxes, taxman, toronto
Many people have a dream to own an investment property which is great and I totally recommend it! However, make sure you know everything that is involved with this kind of purchase.
In Canada, if you have a residence that is not your principal residence and you try to sell it, any money earned on the sale could be considered capital gains or income which means it will be taxed, but by how much and how do you determine what is capital gain or income?
There is a fine line on how the CRA determines whether it is income or capital gain earned on an investment or not, but here are some things they will look at:
1. Your length of ownership on the property.
2. Your motive or intention at the time you purchased the property.
3. Any work that was done to attract more buyers.
4. If you have had any other similar transactions.
5. The nature of the property sold.
If the CRA determines the money earned on the sale is a capital gain then only half of the amount will be taxed but if it is considered income, typically the entire amount is taxed.
Read the full article and find out how a BC real estate agent made a BIG mistake with his property flips CLICK HERE