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Old 03-13-2015, 12:29 PM   #13
Calgary14
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Join Date: Jan 2014
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Quote:
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?
In case anyone is interested I did a small writeup on how taxes work when you move out of your home and convert it to a rental property. I have first hand experience with this as I did it 3 years ago. I tried to make it as simple as possible but if you have any questions let me know

http://www.ourbigfatwallet.com/how-t...emption-works/

Last edited by Calgary14; 03-16-2015 at 12:47 PM.
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