Capital gains exemption on sale of home

[rsargant]

Hi,
I tried doing a search for an anwser to this question, but didn't have any luck.

If a Canadian purchases a home in the U.S, then sells it when they return to Canada, are they entitled to the U.S capital gains tax exemption of $250,000.

Somebody told me there is a flat 30% tax for non-residents. The exemption is only available to permanent (green card) residents or U.S citizens. I am trying to get a solid anwser to this question since it would greatly impact my decision to purchase a home for a relatively small time period (say 3-4 years).

[nelsona]

If it is your principal home for 2 years or more, it is tax-free in US , even after you move to canada, as long as you sell it within 3 years of leaving.

There are no special rules for resident aliens: if you reside in US, and file a 1040,you follw and benefit from the same tax rules as for citizens or GCs. You are not considered a non-resident at that point.

Only if you left, and then sold more than 3 years later would you be subject to *some* US tax. There may be withholding, but you would get most or all of it back. Of course if you sold 3 years after returning to Canada, you would have some Cdn tax to pay, based on the growth after you left US.

But if you move down, buy a house, live in it for 2 or more years. sell up nd leave US, its tax-free. Period.