Will this couple have to pay capital gains tax to the provincial or federal government?
A couple of friends of ours put their permanent residence in the Laurentians up for sale, but moved to Montréal before it sold. It just recently sold, 18 months after their move. Will this couple have to pay capital gains tax to the provincial or federal government? The house was not rented while it was on the market.
Albert, Mont Saint Hilaire (Québec)
Since after 1981, you cannot own two principal residences exempt from the capital gains tax at the same time, you must designate one of the two residences as the principal residence for the years during which you own both.
Before 1982, the limit was one principal residence per person and not per familly, as now.
However, given that it is possible to add a year in the calculations, you will essentially be able to eliminate the capital gain for both properties.
Please note that my opinion is limited and that I cannot guarantee anything given that I do not have all the information.
I strongly suggest that you make an appointment for a consultation with me so that I may take all the information into account.