In our last blog, titled “Spending Time in The United States – Are You Liable to the IRS?”, we spoke of the potential tax implications associated with being a deemed resident of the United States. As a snowbird, however, this is not the only thing you need to consider when it comes to your tax strategy.
Moving can be stressful and costly, especially when moving long distances. While there are a number of reasons for families and individuals to move to a new location, there are some situation in which tax relief is available for taxpayers to help minimize the costs associated with moving.
With spring on it’s way, many Canadians are getting ready to sell their home. While selling your home can come with many costs, one cost you won’t have to worry about is paying tax on your principal residence.
Unlike most income we earn throughout the year, neither the income earned from the sale of your home or the capital gain will be taxed when you file your annual tax return, so long as that home was your principal residence. Given the growth we have been seeing in the value of homes across Canada, this can be a substantial amount of income in your pocket.
It has been nearly a decade now since the mortgage lending debacle in the United States caused a meltdown in real estate markets, which led in turn to a general crisis in the financial markets and eventually to the Great Recession of 2008-2009.
While no country was immune from the effects of that economic downturn, Canada did not experience the broad-based mortgage lending and real estate crash which occurred in the U.S. There were a number of reasons for that, but chief among them was likely the different regulatory environment of our banking system and in our mortgage lending practices.
As the time for the traditionally strong spring housing market approaches, the current state of Canadian real estate is on the minds of a lot of Canadians these days. It’s also a concern for Finance Canada, which has made a change to Canadian mortgage financing rules which will take effect on February 15, 2016, in time for the spring housing market.
