I want to know about capitol gains taxes in ontario if living in houses l buy to fix and resell?
I am on a disability pension and my wife works. We want to sell our home we have now is in the country and 1600 sq ft plus basement and huge lot to much to look after.
So we want to buy a fixer upper from funds we get selling our present home of 21 years.
We would like to buy our first fixer upper and live in it and be able to put back on the market in 3-4 months.
We would like to do 1-2 in 2007 and then starting in 2008 do 3-4 a year.
We are planning to store stuff we don’t use much so when we move every 3-4 months there won’
t be a lot to move.
How does capitol gain work when doing what were planning to do above.
If it can’t be done with out paying capitol gains each time would registering it as a business work out better?
My goal is if works out after 3-4 houses l want to go off my pension and buy and fix then resell houses as a job.
The business if had to go that way could pay my son and l and my wife a weekly pay check what type of mortgage would l be best to get?
Capital Gains do not apply to homes if its your principle residence here in Canada. In otherwords, if you live in the house, then sell it, then no CG will apply. But if you live in another house, and sell the fixer upper, then CG will apply to the fixer upper. There is a limit of one PR per family unit.
With that said, its also possible the CRA could audit you and in theory could say that this is tax avoidance because you are consistantly buying, then flipping. Its a bit of a grey area, but it all comes down to intent. Speak to a Accountant on his one.
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