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Tax Information For Individuals Who Are Buying or Selling a House

If you recently sold a home, bought a new one, or if you’re planning to do so, there’s some tax information you need to be aware of, including principal residence exemption, the home buyers' plan, and more. In this post, we’ve discussed it all in detail.

 

Principal Residence Exemption

 

Any amount of capital gain (or profit) when you sell your house may not be subjected to taxes. Generally, you’re not required to pay on capital gain-related income you receive after selling your house if you owned it as your primary home for years.

 

If you’re planning to sell your principal residence, file the sale and get the respective property designated as such on Schedule 3 of your benefit return and income tax. Make sure to fill all the relevant sections of Form T2091(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Trust), with accurate information. It must also be noted that you can only designate one property as your principal residence every tax year. 

 

Home Buyers’ Plan

 A first-time home buyer filling the homeownership form


You may be eligible to reap the benefits of the Home Buyers' Plan if:

· You are buying a home for the first time (you’re considered a new home buyer if you didn't live or have never lived in a house that was yours or your partner’s in the past four years).

· You have a documented agreement to buy a house or build a new qualifying one for your residence.

This plan will allow you to take out money from your Individual Retirement Account (IRA) to build or buy a house. You are allowed to withdraw funds of up to $25,000 per calendar year. Repay the amount in easy installments over the next 15 years.

If you plan to build a home that qualifies, make sure you live in it as your permanent residence for at least a year after the construction is completed.


Home Buyers’ Plan for Disabled People  


If you qualify for disability tax credit or help someone who qualifies for it build or buy a house, you don’t need to be a first-time homebuyer to qualify for the home buyers' plan. The structure must be built keeping in mind that the house is accessible for the person with the disability.


Get Help from Tax Accountants in Edmonton


If you’re about to buy or sell a home, or build a new home for permanent residence, connect with the tax accountants in Edmonton at Duggal Professional Corporation for more tax information.

We’ll help you with tax filing and compliance and identify opportunities to improve your tax savings.

If you need our help, give us a call at 780-863-2224 or fill the contact form here. 

We also offer bookkeeping services, payroll services, startup planning services, and more for businesses.