Tonight I received a phone call from one of my clients about the tax implications of converting a primary residence to a rental property in Ontario, Canada. However, please note that tax laws can be complex and subject to change, so it’s always a good idea to consult with a qualified tax professional for advice tailored to your specific situation. Here are some key points to consider:
- Change in Use: When you convert your primary residence into a rental property, the Canada Revenue Agency (CRA) considers it a “change in use” for tax purposes. This means you’ll need to report this change on your tax return.
- Principal Residence Exemption (PRE): If the property was your principal residence for every year you owned it, you may have been eligible for the PRE, which allows you to claim an exemption on the capital gains when you sell your home. However, once the property becomes a rental, you may lose a portion of this exemption. The PRE is generally prorated based on the years the property was used as a rental compared to the total ownership period.
- Capital Gains Tax: When you eventually sell the rental property, you’ll be subject to capital gains tax on any increase in the property’s value since it became a rental. The taxable capital gain is typically calculated as the difference between the property’s fair market value at the time of the change in use and its selling price when you dispose of it.
- Depreciation and Capital Cost Allowance (CCA): As a rental property, you may be eligible to claim tax deductions for eligible expenses, such as mortgage interest, property taxes, insurance, repairs, and maintenance. Additionally, you can also claim capital cost allowance (CCA) on the building’s eligible costs. CCA allows you to deduct a portion of the property’s cost as a depreciation expense each year. However, claiming CCA can have implications when you sell the property, as it may trigger recapture or capital gains tax.
- Reporting Rental Income: You’ll need to report the rental income generated by the property on your tax return. Rental income is generally subject to tax at your marginal tax rate. You can also deduct eligible expenses from the rental income to reduce your taxable rental income.
Again, it’s important to consult with a tax professional to fully understand the specific tax implications in your situation and to ensure compliance with current tax laws and regulations in Ontario.
今晚，我接到了一个客户的电话，询问将主要住所转为出租物业在加拿大安大略省的税务影响。然而，请注意税法可能很复杂且可能随时发生变化，因此建议您咨询合格的税务专业人士，以获得与您具体情况相适应的建议。以下是一些需要考虑的关键点：
用途变更：当您将主要住所转变为出租物业时，加拿大税务局（CRA）将视其为税务用途的”变更”。这意味着您需要在纳税申报中报告此变更。
主要住所免税（PRE）：如果该物业在您拥有期间的每一年都是您的主要住所，您可能有资格申请主要住所免税。这允许您在出售房屋时对资本增值免税。然而，一旦物业变为出租物业，您可能会失去部分免税额度。通常根据物业用作出租物业的年数与总拥有期的比例，计算主要住所免税的比例。
资本增值税：当您最终出售出租物业时，您将需要缴纳资本增值税，即物业自变为出租物业以来价值的增加部分。应纳税的资本增值通常计算为变更用途时的公允市场价值与处置时的售价之间的差额。
折旧和资本成本津贴（CCA）：作为出租物业，您可能有资格扣除一些可抵税的费用，如按揭利息、房产税、保险、维修和维护费用。此外，您还可以对建筑物的合格成本进行资本成本津贴（CCA）的申报。CCA允许您每年扣除一部分物业成本作为折旧费用。然而，申报CCA可能在出售物业时产生后续税务影响，例如触发资本回收或资本增值税。
租金收入报告：您需要在纳税申报中报告出租物业产生的租金收入。租金收入通常按您适用的边际税率缴纳税款。您还可以扣除租金收入中的可抵税费用，以减少应纳租金收入税款。
再次强调，重要的是咨询税务专业人士，以全面了解您的具体情况下的税务影响，并确保遵守当前的安大略省税法和法规。
