Announcement

Collapse
No announcement yet.

Selling the House

Collapse
This topic is closed.
X
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Selling the House

    Hi everyone! My girlfriend is going through a divorce. When she was with her ex, they bought a house together that was in both of their names (they lived in the house for 8 years). Two months ago, her ex signed over the house to her in lieu of paying spousal support so the house is now 100% in her name.

    We are considering moving in together; she will sell her house and live with me. If she sells the house, is it considered income? Does she have to live in the house for a year before she can sell it and not be charged income tax on it? What are the rules for selling property and not having it considered income?

    Thanks!

  • #2
    That's a real estate question, and I'm not familiar with any of that aspect of the laws.
    If she was living in the home prior to selling I do not see it as earned income or income from other sources for tax purposes. If in doubt CCRA may have a more definitive answer.
    People sell their homes all the time and then bank the money to go against another home etc, and I do not think they were taxed as if this was income.
    If it were a rental property I can see that happening.
    Contact CCRA

    Comment


    • #3
      I agree that its a real estate issue. Might be best to try and get some answers from a realestate lawyer. An agent may be able to give you some insight as well. They deal with these changing situations often.

      Comment


      • #4
        I'm pretty sure that as long as someone has lived in the home as their primary residence for at least two of the past five years consecutively they are immune from the capital gains tax. However, I'm not an expert!!! Best advice would definitely be to call the Canada Revenue Agency and find out.

        Comment


        • #5
          This is a straight forward income tax question. The house was presumably sold for more than what was paid for it, given that it was owned for 8 years in a rising market. Therefore there is a capital gain which essentially is the difference is the selling price (less selling costs i.e. agent commissions and legal costs) and the purchase price.

          In Canada we have a principal residence exemption on capital gains arising from homes we "ordinarily inhabit". You can designate your house as a principal residence even if you only lived there a day out of the year and you didn't designate another property that you owned that (e.g a cottage) as your principal residence.

          Long story short, the capital gain arising from the sale of this house is almost surely exempt from tax.

          Comment

          Our Divorce Forums
          Forums dedicated to helping people all across Canada get through the separation and divorce process, with discussions about legal issues, parenting issues, financial issues and more.
          Working...
          X