Cottage in Canada

akumar · Post by **akumar** » Sat Sep 14, 2013 9:55 pm

We left Canada about 4 years ago, moved to the US and have GC.

We have rented out our house and declared this income to the Cdn government in the past.

However, our tenant has moved out and now are considering keeping the house for our use when we visit family and take summer vacations.

Does doing change our resident status in Canada. Can we keep as a cottage.

Is there special insurance we need to get on our home if it is not our primary residence.

Also at some point we may consider selling the house, we bought the house when we were cdn residents will we need to pay additional capital gains taxes.

nelsona · Post by **nelsona** » Sat Sep 14, 2013 11:24 pm

This does not change your residency status. it is as you say, a cottage. The gains remain taxable just as before, based on how long you owned the property and how long it was your principal residence.

as to insurance, yo u will need to contact a Cdn broker. most companies chanrge high premiums for absent owners.

JGCA · Post by **JGCA** » Sun Sep 15, 2013 2:56 pm

When the cottage went from a priciple residence to a rental property there was a change of use based on FMW at the date of this change but it may have been covered in part of by the principle residence exemption. Now it was rented for a few years or so and it is now going to go back to a persoanl use there should be a gain again at FMW difference between the day it became a rental property and the value it now has on date of conversion. There could be a gain here to be reported on the conversion if there was an increase in the FMW at time of conversion to rental from the FMW when you rented it . This is a deeming provision and not based on actually selling the property but the value will become your cost if there is a gain to report now.