Quote:
Originally Posted by Bend it like Bourgeois
What are you doing with condo B in the year off? Renting it? Somehow I think there will be a deemed disposition or two in there.
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Bingo.
"A complete or partial change in the use of a property from a principal residence to income-producing, or vice-versa, results in a deemed disposition of the property by the taxpayer at fair market value."
http://www.cra-arc.gc.ca/E/pub/tp/it....html#P62_7508
Lots of what you need to solve your dilemna will be in here and in IT-437,
Ownership of Property (Principal Residence)
I haven't put a ton of thought into this, but wouldn't it be better to designate Condo A as the PPR for year 2 (not declaring anything for yr 1) and then designating Condo B as the PPR in yr 3? The main objective is to shelter the gain on Condo A as Condo B won't appreciate as much in the next 2 years as what you've made on Condo A. I wouldn't do anything to jeopardize the PPR exemption on Condo A.
I don't think it's worth designating Condo B as the PPR for the 4-6 months before you move in, appraisals are expensive and it's your call as to how much the market will increase in the next 4-6 months (if at all).