By Cleo Hamel on August 9, 2018 Estimated reading time: 1 minute
How to minimize tax on the sale of a condo
By Cleo Hamel on August 9, 2018 Estimated reading time: 1 minute
The basics on how to lower your tax bill
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Q: My brother and I own a condo in Toronto which is his principal residence but not mine. He is going to buy me out and continue to keep it as his principal residence. How can I minimize my capital gains on this transaction?
—Laura K.A: A capital gain arises when the property is sold at a value higher than the Adjusted Cost Base (ACB), minus expenses related to the sale.
In order to minimize any capital gains, you should be mindful of what amounts you can include in the ACB of the property and the outlays and expenses of the sale. Assuming the condo has always been your brother’s principal residence, was not owned prior to 1994 and was never an ‘income producing property,’ the ACB can include the original purchase price (including legal expenses, land transfer taxes, etc.) and additions and improvement.
Allowable outlays and expenses, which can further reduce any capital gain would be commissions, legal fees, transfer taxes and most other expenses you incurred in order to sell the property.
Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with a qualified advisor.
Can I gift a condominium unit that I own outright that was previously my principle residence to my Father and Mother without tax?
Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with a qualified advisor.