In terms of capital gains, I've talked to my brother in law who is an accountant and has taken tax courses fairly recently, and he explained it to me this way...
- One Bedroom Condo (bought but unfinished) = Condo A
- Two Bedroom Condo (that we are renting now, hoping to buy) = Condo B
In year 1, we purchase Condo B while waiting for possession of Condo A.
In year 2, we take possession of and sell condo A.
In year 5 (way down the road) we sell Condo B.
In year 1,3,4 & 5 we list Condo B as our primary residence (no secondary residence). In year 2, we list condo A as our primary residence, with condo B as our secondary residence.
From how he explained it to me, we would be taxed on the capital gain of condo B for 1 of 5 years, which is much better than being taxes on the entire gain of condo A.
Hopefully this makes sense... both my dad and I had to listen to him explain it twice before we could make sense of it. Logistically it makes sense, but when has Revenue Canada relied on logic?
As an aside, capital gains tax is a really frustrating tax! We didn't do this to try and make a quick buck - we did this so that we'd have a place to live in Calgary that we could afford. So, on a certain level why should I be penalized when all I want to do is reinvest in a place where I can actually afford to have a family? Sorry... little rant...
Thanks for all the advice guys... this is great stuff!