*The Commerce Journal>>>Canada Taxes

If I sell my primary residence and move into my rental property can I avoid capital gains tax?

you do not pay capital gain tax on selling your principal residence in canada - it is tax exempt

Ignore the first answer, once again an American who didn't read the category.

The sale of the principal residence is tax free, always. On the current rental, the value at the date it becomes a principal residence determines any capital gains due when that property is later sold. Any gain from the date of purchase to the date it becomes your principal is taxable, but only once the home is sold. Any gain from that date to the date of sale is tax free again.

You would be best to have an appraisal done when you move in. That will definitively set the value at that date.

Yes in order to get that 250 or 500 (MFJ) exlusion you must live in the house for 2 out of the last five years. So if you move into your rental property you couild convert it to your principal residence and get the 250 exclusion to avoid capital gains.

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