What every Ontario property owner needs to understand before they sell
Capital gains tax can significantly impact the proceeds of a real estate sale. Understanding how it applies — and your options — helps you plan smarter.
If the property you're selling is your principal residence, you may qualify for a full or partial exemption from capital gains tax. This is the most common way Canadian homeowners avoid CGT entirely.
In Canada, only 50% of your capital gain is added to your taxable income for the year. Your actual tax owing depends on your marginal tax rate. A tax advisor can calculate your precise exposure.
Secondary properties — cottages, rental units, investment condos — do not qualify for the principal residence exemption and are subject to capital gains tax on the profit from their sale.
Tax rules change. Your situation is unique. Our team can refer you to trusted accountants and tax specialists in Burlington who work specifically with real estate clients.
"Selling a second property without understanding your tax implications can cost you tens of thousands of dollars. Plan ahead."
Your ACB includes the original purchase price plus capital improvements made over the years. Keeping renovation receipts can reduce your taxable gain.
Legal fees, real estate commissions, and other disposition costs can be deducted from your proceeds to reduce the capital gain amount.
If you anticipate lower income in a given year, selling then may reduce the effective tax rate on your capital gain. Timing can make a meaningful difference.
Transferring property between spouses may trigger different tax rules. An estate planning lawyer and accountant should be consulted before any intra-family transfer.
Let our team connect you with trusted tax professionals and guide you through a tax-smart sale strategy.
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