Buying Home in CA and moving to US

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
ali90
Posts: 7
Joined: Fri Apr 29, 2016 7:06 pm

Buying Home in CA and moving to US

Post by ali90 » Fri Jul 03, 2020 3:52 pm

I want to move US for a few years as it provided better job opportunities on TN visa. But at the same time I also want to purchase a house somewhere in Canada for retirement purposes. If I purchase a house on my name there can be complications with resident vs non-resident thing I believe. Also if I rent it out to someone I know closely might risk showing close ties to Canada.

I would want to know what is the best option here. Please advise, following is my understanding.

Buy a house under a personal name:
- Can use RRSP home loan as a downpayment
- Will get a first time home buyer rebate in Ontario
- When I sell it there will be no tax on capital gains if it is primary residence when I sell years later.
- Will need to keep paying property taxes and maintenance from my pocket if house is vacant. If I rent it then 25% tax on non-residents plus can run into the close ties to Canada debate.

Buy a house under corporation name:
- Cant use RRSP, but since I do the contracting job I can leave money as retained earnings after paying 12.5 corporate tax and not claim dividends. Use that money to fund the house and take loan on corporation name for the rest of the money.
- Can give me flexibility if I travel anywhere because LLC will hide my personal identity so no more non-resident vs resident questions.
- Will be taxed on capital gains if I sell the property, probably 12.5% federal+ontario.
- Will need to keep paying property taxes and maintenance if the house is vacant but if rented can also use rental income.
- Probably will need to file T2 return every year.

nelsona
Posts: 16452
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Buying Home in CA and moving to US

Post by nelsona » Sat Jul 04, 2020 8:34 am

The HBP would not be practical for the Cdn home, sicne you cannot use HBP as a non-resident, and if you use it while resident and then leave, youy immediately need to repay the entire HBP balance.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

nelsona
Posts: 16452
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Buying Home in CA and moving to US

Post by nelsona » Sat Jul 04, 2020 8:36 am

You cannit have a principal residence in Canada if you are a non-resident. The years you were outside Canada would subject that property to cap gains tax, as woudl using it as a rental.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

carlosdiaz29
Posts: 2
Joined: Mon Jul 06, 2020 5:06 pm

Re: Buying Home in CA and moving to US

Post by carlosdiaz29 » Mon Jul 06, 2020 5:07 pm

How difficult could be become a canadian resident?

Post Reply