Selling US property and moving to Windsor

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shwuying
Posts: 16
Joined: Thu Jan 27, 2005 12:36 pm

Selling US property and moving to Windsor

Post by shwuying »

Hi,
I am an US citizen immigrating to Canada. My visa has been approved. I currently own a house in US and purchasing a condo in Windsor. Will you mind to let me know when is the better time to sell my house, and why? Thank you.

nelsona
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Location: Nowhere, man

Post by nelsona »

The best time to sell is when you have a buyer willing to pay more than your asking price[:D]

Seriously, since this is a tax forum, the best/simplest time to sell would be before buying your new condo.

That way your house sells tax-free in US (assuming you've owned and lived in it 2 years), and you will not pay any Cdn tax (you may not even have to report it in Canada).

Otherwise, the longer you hold onto it, the more it will be taxed on sale, particularly if you rent it out.

<i>nelsona non grata</i>
shwuying
Posts: 16
Joined: Thu Jan 27, 2005 12:36 pm

Post by shwuying »

nelsona, Thank you.

Can you also let me know if I need to pay any Canadian taxes if I report to Canadian Immigration before I sell my property in US?

nelsona
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Post by nelsona »

'Repoting' to Cdn immigration doesn't trigger taxation. Setting up a Cdn residence does.

If you sell your US home after buying home in Canada, you will be resposible for Cdn tax on the difference beteen the value when you moved, and the value when you sell. This would be negligible if it sold in the first 2-3 months after arrival.

As I said, "the longer you hold onto it, the more it will be taxed on sale"



<i>nelsona non grata</i>
shwuying
Posts: 16
Joined: Thu Jan 27, 2005 12:36 pm

Post by shwuying »

Due to the housing market, my home selling is taking its time. I know in Michigan, you can sell you home without being taxed for capital gain after you live in the house for a few years. I am almost ready to move over to Windsor, I know that I have to apply for the new drivers license in Ontario and possibly loose my Michigan driver's license. Say, if I moved to a rental home first and the home is sold in 3-4 months. Does it mean that I am selling my home as a 'non-resident'? Does that subject to a different tax rules?
Norbert Schlenker
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Post by Norbert Schlenker »

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">If you sell your US home after buying home in Canada, you will be resposible for Cdn tax on the difference beteen the value when you moved, and the value when you sell.<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Because a principal residence need not be in Canada and because of the way the Canadian principal residence exemption is calculated, no capital gains tax will be due on the sale of the Michigan house (nor will any future liability for the Windsor condo be created) as long as the Michigan house is sold before the end of 2006.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Agreed. So long as he claims that his US home is his principal residence for no longer than one year (not simply the end of 2006) after buying his condo, during which time he moves to Canada and sells the US house, he will owe no Cdn tax on either property (assuming that he doesn't later change the use on the condo)

<i>nelsona non grata... and non pro</i>
bojo1965jon
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Re: Selling US property and moving to Windsor

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