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Old 03-11-2015, 09:17 PM   #10
Mortgage Made Easy
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Location: Calgary, AB
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Originally Posted by pseudoreality View Post
Thanks for this. I am in almost the exact same position, although I'm hoping I can convince my wife to wait a few more years before we upgrade.

I've got a question on the tax implications of doing this. I know in Canada you do not pay capital gains tax on your principal residence, but you do on income properties. Therefore I would imagine you would get the house you live in appraised before you move out and then when you sell it in the future you only pay the capital gains from that appraised value. Is this correct?

Also, would it make sense to maximize the leverage on investment property versus your principal residence due to the interest on investments being tax deductible?
Yes you would establish the value of your current home when you move out. This can be done by using an appraised value... Consult an accountant to be sure everythjbg is recorded well.

As for leveraging the existing property, yes this is one avenue but be sure to consult an accountant to ensure everything is done correctly.
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