As renting rooms AirBNB and other short-term rental sites are becoming more popular we thought we would share some information on the repercussions this might have on your capital gains assessment when you go to sell your house.  


This REW article Principal Residence + Short-Term Rentals + Resale = Capital Gains Tax by Kara Kuryllowicz outlines the potential impact of using your house for short-term rentals could have on the amount of capital Gains tax you are assessed when you sell your house. 


"Like so many homeowners that rent through AirBnB and comparable websites, Steve, Barbara and Jody consider them their principal residences because they live there more than they live in any other location.


Most Canadians know they’ll pay capital gains tax to the Canada Revenue Agency when they sell an asset, such as their home, or investment for more than they paid. They also know and appreciate the fact their principal residence is exempt.


However not every homeowner that rents part-time realizes their homes’ principal residence status could change because it’s being used differently and that 50% of the gain may be taxable as part of their regular income."


and perhaps most importantly


“When you’re ready to sell your principal residence, the CRA’s perspective on its status is the only one that matters and they assess each situation individually – it’s incredibly complex and subject to interpretation.”



Read Full  Article - https://www.rew.ca/news/principal-residence-short-term-rentals-resale-capital-gains-tax


Points to Consider 

Before you rent or use your principal residence for business consult with your accountant.


CRA may consider that your principal residence status may change if all or part of your home is used for rental or business purposes depending on if your rental or business use of the property is relatively small in relation to its use as your principal residence.


When it comes time to sell 50% of the gain in value of your home may be taxable as part of your regular income.

Read full post


This article by Kara Kuryllowicz explains the ins and outs of the proposed First Time Home Buyers Incentive which is expected to become available in or around September 2019. 


"The FTHBI is a program that will help qualified first-time home buyers without adding financial burden. As there are no monthly payments, it will free up income to pay for other everyday expenses.  Unlike some of the other assistance programs tried in the past, the FTHBI will also require borrowers to meet minimum insured mortgage down payment requirements, ensuring they are invested in their purchase."


Read the full article here


My Take away  - on the proposed new First-Time Home Buyers Incentive


"The  FTHBI is limited to households with a maximum combined income of $120,000. In addition, the program caps out at four times the applicant's annual income, which means it can only help homeowners looking to buy properties where the mortgage value including the CMHC loan doesn’t exceed $480,000."


This WILL give the opportunity for millennials and other 1st time home buyers living in the Lower Mainland an opportunity to get into the real estate market. With a great selection of condo's and townhouses available in this price range there will be lots to choose from that would meet the criteria for using the First Time Home Buyers Incentive. We will be waiting for more details to be released to know exactly what form this incentive will take and will keep you posted as we learn more in the coming months. 

Read full post
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.