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Tag: selling your home

  • How much is your home really worth? – MoneySense

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    That confusion comes down to two different measures: market price and appraised value. While they sound similar, they serve different purposes and can vary widely. Understanding the difference helps you make better decisions when selling, refinancing, renovating, or dealing with legal and tax matters.

    Market price vs. appraised value

    The market price of your home is what a buyer will pay for it today. It can shift quickly since it’s driven by factors such as:

    • Demand in the specific neighbourhood
    • Competing offers or bidding-war situations
    • Buyer emotions, urgency, and fear of missing out (FOMO)
    • Interest rates and affordability

    In fast-moving markets like Toronto and Vancouver, the market price can change from week to week, or even sometimes day to day.

    In contrast, appraised value is designed to be steady and defensible. It answers one key question: Based on recent evidence, what is this home worth in the current market? Rather than considering emotion or competition, an appraiser focuses on:

    • Recent nearby sales
    • Property size, layout, and condition
    • Number of bedrooms and bathrooms
    • Quality and relevance of renovations
    • Finishes and fitments of the property
    • Overall quality of workmanship
    • Neighbourhood trends
    • Lot size, zoning, and external influences
    • Basement finishes
    • Parking and/or garage

    Banks, lawyers, courts, and the CRA rely on appraisals since they’re unbiased and consistent, even when market sentiment is volatile.

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    Why don’t market and appraisal value always match?

    It’s not uncommon for appraisals to come in lower (or occasionally higher) than the market price. Here are some of the most common reasons why.

    1. Buyers don’t always make decisions based on logic

    People fall in love with homes, they get attached, they get competitive, and they get tired of losing bidding wars. All of this can result in making an unrealistic offer on a property that doesn’t depict what’s actually happening in the market. 

    A buyer who’s fed up or emotionally invested might pay well above what recent sales support. An appraiser cannot use a one-off emotional purchase to justify the final value.

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    2. Appraisers steer past active listings

    Homeowners often compare their home to what others are asking for down the street. But list prices are just that—prices that someone hopes to get. Some listings sell for less than list price, some sell for more, and some never sell at all.

    Appraisers focus only on sold data because it reflects actual behaviour, not speculation.

    3. Renovations don’t always add dollar-for-dollar value

    This is one of the most common misunderstandings. You might spend $70,000 on a new kitchen, but the market might only value that upgrade at $25,000 to $40,000. Landscaping and high-end finishes often have even lower returns.

    Appraisers measure value based on how the market reacts to upgrades, not how much they cost you.

    4. Timing can shift value quickly

    Values can change even within the same month based on what’s happening in the market and wider economy. For example, a rate announcement might push buyers in or out of the market, a sudden spike in listings could cool prices, or seasonal patterns (like a December lull or summer slowdown) could reduce activity. 

    Appraisers capture a snapshot of the market at a very specific moment.

    5. Unique homes are difficult to compare

    A one-of-a-kind home like a heritage property, custom build, or oversized lot might attract a buyer willing to pay a premium simply because they love it. But an appraiser must look at the broader market. If there aren’t many comparable sales, their valuation will naturally be more conservative.

    6. Homeowners often overestimate their home’s value

    This is completely understandable—you are emotionally attached to your home and online valuation tools or old sales prices can set unrealistic expectations. Appraisals strip out emotion and focus only on evidence.

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    Tejveer S. Walia, P.App, CRA

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  • How to choose the best appraisal firm – MoneySense

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    1. Look for designated appraisers (AIC Members)

    The first and most important factor is credentials. Ensure the firm’s appraisers are designated members of the Appraisal Institute of Canada (AIC)—either CRA (Canadian Residential Appraiser) or AACI (Accredited Appraiser Canadian Institute).

    These designations guarantee that your appraisal report meets Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) requirements, ensuring credibility and acceptance by:

    • Major banks and lenders
    • Lawyers and accountants
    • The Canada Revenue Agency (CRA)

    2. Choose a firm with local market expertise

    Canada’s real estate market is diverse and constantly evolving. From urban condos to suburban family homes and rural properties, each region has its own unique value drivers. Choose an appraisal firm with deep local market expertise and access to regional MLS data through the appropriate real estate board.

    Local expertise ensures accurate valuations that reflect true market conditions and recent comparable sales.

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    3. Review their range of services

    Different situations require different types of appraisals. A reputable firm should offer a comprehensive range of appraisal services, including:

    • Mortgage financing & refinancing appraisals
    • Estate and probate appraisals
    • Retrospective (historical date) appraisals
    • Tax and capital gains appraisals
    • Separation or divorce appraisals
    • Pre-listing or pre-purchase appraisals

    Having a firm that specializes in multiple areas ensures they can handle any appraisal purpose you need—with consistency and professionalism.

    4. Check turnaround time and communication

    Timely service is crucial, especially when deadlines matter for refinancing, court filings, or estate settlements. The best appraisal firms maintain clear communication, reasonable turnaround times, and transparent pricing. Ask upfront:

    • What’s included in the quote?
    • How long will it take to receive the final report?
    • Will my lender or lawyer accept the report?

    Firms that prioritize client communication are typically the most reliable.

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    5. Read client reviews and testimonials

    Before choosing an appraiser, read Google Reviews and client testimonials. Positive reviews often highlight qualities such as professionalism, accuracy, and reliability—all signs of a reputable firm.

    Look for reviews that mention:

    • Clear explanations of value
    • Professional service and punctuality
    • Easy-to-read, detailed reports

    6. Compare quotes—but don’t choose based on price alone

    While cost matters, the cheapest quote isn’t always the best choice. A lower price can sometimes mean less experience, limited data access, or generic reports that aren’t accepted by banks or lawyers.

    Instead, focus on value for service: accuracy, reliability, and professional certification should come first. A reputable firm like Walson Consulting Inc., for example, offers:

    • Certified appraisers—reports prepared by accredited professionals
    • Standards compliance—following CUSPAP or other recognized appraisal standards
    • Local market expertise—knowledge of the neighborhoods or regions relevant to your property
    • Reasonable turnaround times—efficient service without sacrificing accuracy
    • Transparent pricing—clear quotes and no hidden fees

    Whether you need an appraisal for financing, estate planning, or tax purposes, you want to ensure that the firm you choose delivers accurate, credible, and professional valuation reports you can trust.

    Final thoughts

    Choosing the best appraisal firm doesn’t have to be complicated. Focus on credentials, experience, communication, and reputation, and you’ll find a firm that provides the accuracy and confidence you need.

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    About Tejveer S. Walia, P.App, CRA


    About Tejveer S. Walia, P.App, CRA

    Tejveer S. Walia is a designated appraiser with Appraisal Institute of Canada (AIC) and the founder of Walson Consulting Inc., serving homeowners, lawyers, and estate professionals across the Greater Toronto Area (GTA).

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    Tejveer S. Walia, P.App, CRA

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  • What happens if you sell real estate to family for a dollar? – MoneySense

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    Fixing a past tax mistake

    If you discover a mistake, or you want to come forward with an omission, there is a path to do so with the Canada Revenue Agency (CRA). It is called the Voluntary Disclosure Program (VDP). According to CRA: 

    “The Voluntary Disclosures Program (VDP) is an opportunity for taxpayers to inform the Canada Revenue Agency (CRA) about and correct errors or omissions in their tax obligations. If relief is provided by the CRA under the VDP, a taxpayer may receive some penalty and interest relief, and will not be referred for criminal prosecution. Any taxes owing will still have to be paid by the taxpayer in full.”

    Changes were introduced for the VDP on October 1, 2025. The application form, Form RC199, Voluntary Disclosures Program (VDP) Application, was simplified to make it easier to file. The program has also become less restrictive. CRA has begun a program of sending education letters about unreported income or ineligible expenses to ensure compliance that does not prevent a taxpayer from applying. Prior to the changes, a VDP needed to be unprompted. 

    If you are under audit or were uncompliant in the past in an egregious manner, you may be restricted from a VDP application. 

    There are two types of relief that the CRA provides under the VDP:

    • General relief normally applies to unprompted applications. These applications will receive 75% relief of the applicable interest and 100% relief of the applicable penalties.
    • Partial relief normally applies to prompted applications. These applications will receive 25% relief of the applicable interest and up to 100% relief of the applicable penalties.

    Principal residence exemption for a cottage

    The good news for your mother’s situation, Susan, is that there was probably no tax payable on the transfer of her cottage to you. Often, a cottage is subject to capital gains tax when it is sold, transferred, or upon the death of the second spouse—but not always.

    A cottage can qualify for the principal residence exemption (PRE). The PRE is available to use for any property you ordinarily occupy, with no limit on the number of days. It does not matter where you primarily live, nor where your mailing address is registered. 

    Since the only real estate your parents ever owned was this cottage, Susan, the property was likely non-taxable, whether it was sold to you for $1 or for fair market value by your mother. 

    Of note is that since the 2016 tax year, there is a requirement to report the disposition of a principal residence on your tax return in order for it to qualify. Previously, it was not a requirement to report a property that qualified as your principal residence for every year that you owned it.

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    Selling or transferring real estate for less than fair market value

    It is also worth mentioning that selling a cottage that does not qualify for the principal residence exemption for less than the fair market value  is not a way to avoid tax, nor is gifting it for no consideration. A sale or transfer to a non-arm’s length party—like a child—is considered a sale at the fair market value with tax payable accordingly by the seller or transferor. 

    For the child who acquires the property, there can also be an element of double taxation. If their acquisition cost is below the fair market value, they could end up paying tax unnecessarily on the difference between the acquisition cost and the fair market value at the time of the transfer when they dispose of the property in the future. 

    I think this is what you are worried about, Susan. But the good news is the transfer to you may be considered to have taken place at the fair market value, even though you only paid $1. CRA addressed this in a tax interpretation in 2019 (24 January 2019 2018-0773301E5):

    “In certain circumstances, the Canada Revenue Agency may be willing to accept that the transfer of property between non-arm’s length parties for the nominal amount of $1 could be considered a gift. For example, if the agreement governing the transfer provides for consideration of $1 merely to ensure that the agreement is legally binding, the CRA may consider the transfer to be a gift.”

    This may be the case in your situation, Susan. They also say:

    “Paragraph 69(1)(c) of the Act will apply where a taxpayer (the recipient) has acquired property by way of “gift, bequest or inheritance.” If paragraph 69(1)(c) applies, the recipient is deemed to acquire the property at FMV [fair market value].”

    So, you may be in the clear. If in doubt, you could contact CRA to request a generic Technical Interpretation or a more formal Income Tax Ruling specific to your situation. 

    The takeaway: For anyone considering a transfer or sale of real estate to a family member, professional advice is a must.

    Leave your question for Jason Heath

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    About Jason Heath, CFP


    About Jason Heath, CFP

    Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.

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    Jason Heath, CFP

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  • What is porting a mortgage in Canada—and when should you do it? – MoneySense

    What is porting a mortgage in Canada—and when should you do it? – MoneySense

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    But picking a fixed mortgage rate can be problematic if you decide to sell your house and are forced to break your mortgage contract in the middle of your term. The penalties associated with breaking a fixed-rate mortgage can be very costly. 

    Thankfully, many mortgage lenders allow you to avoid penalties by porting your mortgage, which means carrying your existing term and interest rate to your new property. 

    So, how does porting a mortgage work, and when does it make sense? 

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    What is porting a mortgage? 

    Porting a mortgage refers to taking your current mortgage and transferring it to a new property when you move. Your existing mortgage rate and term are transferred along with your current mortgage balance. 

    To qualify for a mortgage port, you must follow certain rules. For example, you must sell your home and purchase a new one at roughly the same time—usually within 30 to 120 days, depending on the lender. Also, you can’t port more than your current mortgage amount. If you need additional funds to purchase your next home, the new money will be subject to current interest rates and added to the mortgage balance—but more on that later. 

    Most Canadian mortgage lenders offer portability as an option, but not all do. That’s why it’s important to find out if a prospective lender offers this feature before you take out a new mortgage. After all, you never know when your plans might change and you need to sell your home before your mortgage term ends.

    When does it make sense to port a mortgage?

    There are two main reasons you would want to port your mortgage instead of breaking your contract and starting fresh. The first is to keep your existing interest rate if it’s lower than current mortgage rates. The second is to avoid breaking your mortgage early and incurring a costly penalty. 

    “Porting is typically a good idea if your existing fixed mortgage rate is lower than current rates and you’re moving before your mortgage maturity date,” explains Lyle Johnson, a Winnipeg-based mortgage broker. “By keeping your existing mortgage, you avoid the prepayment penalties that would apply if you break your mortgage before its maturity date, while keeping your low fixed rate.” 

    What about a variable-rate mortgage? Most variable mortgages do not offer a portability feature. (Note, however, that you may have the option to convert to a fixed rate first, and then port.) If you decide to sell your house before your term expires, you’ll likely need to break your contract and obtain a new mortgage for the new property. That said, the penalty for breaking a variable mortgage is usually equal to three months’ interest on your outstanding balance, which is often less than a fixed-rate mortgage penalty. 

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    Colin Graves

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  • How much income do I need to qualify for a mortgage in Canada? – MoneySense

    How much income do I need to qualify for a mortgage in Canada? – MoneySense

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    Fredericton: Home prices poised to rise with rate cuts

    Fredericton marks the third and final city where the additional required income to purchase a home remains below $1,000. The average home price there rose $2,600 on a monthly basis to $292,900, which pushed the minimum income up by $430, to $68,170. According to CREA, Fredericton home sales declined 15.2% over the course of the month.

    This reflects real estate trends in New Brunswick as a whole, as home prices have steadily increased over the past three months. This is mainly due to shrinking supply, as new listings remain 12.1% below the five-year average for March. However, sales and supply could be poised to perk up should interest rate cuts materialize later this summer.

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    The least affordable places to buy in Canada

    Toronto, Hamilton and Vancouver sit at the bottom of the list.

    Toronto: The toughest place to buy a home in March

    It should come as no surprise that Toronto home buyers are the most financially squeezed; home prices there escalated sharply over the pandemic’s lockdown years, and remained elevated at an average of $1,113,600 in March, up $19,700 from February. That resulted in the average buyer needing an annual income $3,400 higher than they did in February, making it now $217,500.

    While home sales have chilled slightly at the start of the year, the Toronto Regional Real Estate Board (TRREB) says enough competition remains in the market to push prices higher, and that this will only tighten further as interest rates start to decline.

    Source: Ratehub

    Hamilton: Another challenging Golden Horseshoe market

    The City of Hamilton—which boomed in popularity in recent years as a real estate destination—came in second in terms of worsening affordability. The average home price does remain under the $1-million mark, making it a much more affordable option when compared to neighbouring Toronto. But that gap is narrowing sharply, up by $14,600 in March to an average of $850,500. In terms of income, a Hamilton buyer needs to earn $169,640 annually, an increase of $2,540.

    Vancouver: Softening sales, but demand still drives prices

    The City of Vancouver remains Canada’s most expensive housing market, with an average price of $1,196,800 in March, up $13,500 from the previous month. As a result, a buyer there must earn $232,620 in order to qualify for the required mortgage, an increase of $2,270 compared to February.

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    Penelope Graham

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  • How to calculate the adjusted cost base of inherited property – MoneySense

    How to calculate the adjusted cost base of inherited property – MoneySense

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    When you inherit real estate, any accumulated tax, if applicable, is generally paid by the estate of the deceased. This is because when a taxpayer dies, they are deemed to have sold their assets on their date of death, and any tax payable is calculated on their final tax return.

    Property inherited from a spouse or common-law partner

    One exception is for real estate left to a surviving spouse or common-law partner. If you inherited this building from your spouse or common-law partner, Bill, it may not be the property’s 2003 value that you need to determine.

    By default, capital assets pass to a surviving spouse or common-law partner at their original cost, unless the executor of the deceased elects otherwise. In this case, you would declare any change in value between the original cost of the property and its fair market value at the time of sale. If the deceased taxpayer is in a low tax bracket in their year of death or has tax deductions or tax credits to claim, a value that is higher than the original cost may be reported.

    A capital asset’s original cost is referred to as the adjusted cost base (ACB), and it’s based on: the original acquisition price (typically the purchase price); acquisition costs (like land transfer tax for real estate); and adjustments over the years (like renovations for real estate or reinvested dividends for a stock).

    What to do when the adjusted cost base is unknown

    Assuming you did not inherit this property from your spouse or common-law partner, Bill, you would need to know the value of the property at the time you inherited it. It should be the fair market value of the property reported on the tax return of the person you inherited it from in 2003. If the building was their principal residence, it may not have been reported.

    Assuming you have no record of that value, you could estimate the value on your own. If that’s not easy to do, you can have a realtor look up sales of comparable buildings in the same area around 2003 to try to determine a value. A designated appraiser may be the professional best equipped to provide a valuation based on historical sales data, if it’s available. A formal valuation by the Canada Revenue Agency is an option, but it is not required for your tax filing.

    Don’t forget about renovations and rental income

    If you have done any renovations to the property since inheriting it, Bill, those renovations may have increased your ACB. Capital improvements are added to the original acquisition cost (the property’s value when you inherited it, in your case) to determine your tax cost in the year of sale.

    If the property was a rental property, you may have claimed capital cost allowance or depreciation to reduce the net rental income in some or all of the years you owned it. Those past tax deductions are recaptured in the year of sale and included in your income.

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    Jason Heath, CFP

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  • Buying pre-construction: What if your home is worth less than you paid? – MoneySense

    Buying pre-construction: What if your home is worth less than you paid? – MoneySense

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    What are your options if you find yourself in this situation? Let’s look at the intricacies of buying a pre-construction home in Canada, why some buyers are having difficulty closing on their purchases, and steps you can take to avoid losing a large deposit.

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    How does buying a pre-construction home work in Canada? 

    Generally, pre-construction homes offer several key benefits. For one, the property is brand new. Unlike with a resale home, you can customize a new home right down to the finishes and countertops. And because the home is new, you can expect to spend a lot less on repairs and maintenance.

    New homes also give you more time to save. With resale homes, you typically must pay the deposit and down payment within a 30-to-90-day timespan. With new homes, the deposit can often be spread over several months or years.

    In case you’re new to buying pre-construction homes in Canada or you’d like a refresher, here are some important details to be aware of.

    Payment schedule for pre-construction homes

    Unlike a resale home when you usually pay the deposit within 24 hours of your offer being accepted, with a pre-construction home there’s typically a deposit payment schedule.

    With a pre-construction home, you’re usually expected to have a down payment of between 20% and 25%. This may sound like a lot at first, but the amounts are spread over several months and years. For example, you may be asked to make a deposit of $3,000 at the time of making an offer, followed by 5% within 30 days of the offer, 5% within 90 days, 5% within 180 days and a final 5% at the time of occupancy.

    Oftentimes, the deposit structure is up for negotiation. If the builder’s payment schedule doesn’t work for you, you should try to negotiate one that does.

    Mortgage rules for pre-construction homes

    In Canada, mortgage rules are the same for a new home as a resale home. For example, you’re required to pass the mortgage stress test in both cases. However, a key difference is timing. With a new home, you don’t know what mortgage rates will be when the property closes. Mortgage rates could be the same, or they could be higher or lower. This adds uncertainty. Without knowing what mortgage rates will be, you actually don’t know if you’ll be able to afford the property in the future.

    There’s also the issue of the property value for mortgage lending purposes. Lenders don’t sign off on the mortgage for a pre-construction home until the time of closing. You make an offer without financing, then hope to get financing at the time of closing.

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    Sean Cooper

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  • The tax implications of buying a second home in Canada – MoneySense

    The tax implications of buying a second home in Canada – MoneySense

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    Primary residences vs. secondary properties

    The tax treatment of real estate in Canada depends on its use. The home you live in—your primary residence—is normally exempt from capital gains tax upon sale due to the primary residence exemption.

    This exemption can even be used on vacation properties, so long as it is “ordinarily inhabited.” While the definition of “ordinarily inhabited” is vague, it means at a minimum you spent time living there during a calendar year. And while there’s an exception for years in which you move and own two homes, you can otherwise only declare one property as your primary residence at any given time. Generally speaking, you’ll want to apply the exemption to the property that has increased in value the most.

    Rental properties don’t qualify for this exemption under most circumstances. When they’re sold, if they have increased in value, capital gains taxes will normally apply.

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    Capital gains tax on a second property in Canada

    When selling a property, if you can’t use the primary residence exemption, then capital gains taxes will be levied against the increase in value. But capital gains are relatively tax-efficient, since only half of the gain is taxable—the other half you can stick in your jeans.

    To calculate the capital gain, you need to first calculate the adjusted cost base, or ACB, against which the sale proceeds will be measured. The starting point is the purchase price, and from there certain additions and deductions can be applied. Common additions include expenses incurred to purchase the property, like commissions and legal fees. Capital expenses, like those used to improve or upgrade the property, can also be added.

    Here’s where it gets a little complicated. Because a building is depreciable property which may wear out over time, investors can deduct a percentage of the property’s cost each year—known as “capital cost allowance,” or CCA. It can only be used against the building itself, not the land portion of the property. When the property is eventually disposed of, the undepreciated capital cost, or UCC—that is, the original cost minus the amount of CCA claimed—is recaptured and taxed as income, with additional proceeds being taxed as a capital gain.

    As a simplified example, say you bought a rental property for $1,000,000. Over the years, you deducted $200,000 of CCA. You then sold the property for $1,300,000. Here’s how it would be taxed:

    • Original cost: $1,000,000
    • CCA claimed: $200,000
    • Undepreciated capital cost: $800,000

    When the rental property is sold, that $200,000 CCA is recaptured and taxed as income. And since you sold it for $1,300,000, you have a capital gain of $300,000. Half of this is taxable, so you add $150,000 to your income that year. Between the recapture and the taxable half of the capital gain, you have $350,000 of income to report on your tax return.

    Capital expenses vs. current expenses: What’s the difference?

    In the above example, the cost of improving the property is a capital cost. It extends the useful life of the property or increases its value. Capital expenses can increase the ACB of the property and can be deducted over time via the CCA. Examples include:

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    Mark McGrath, CFP, CIM, CLU

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