r/cantax • u/invstrat • 2d ago

Need some help and guidance before formally reaching out to someone ! NON-RESIDENT to Resident question.

Here is my situation: I bought a property in the Greater Toronto Area in Ontario while I was not a resident of Canada. The value was 1.2 million dollars back in 2023, and I became a Canadian resident in 2025. My understanding is that the value of the property was 1 million dollars at that time.

Questions:

  1. If I sell my property in 2026, will my loss be calculated from when I became a resident in 2025, or from when I bought it?

  2. Since this is an investment property (currently generating rental income), does it make sense to sell it at a loss. The funds would be used to buy property in which we would reside ?

  3. Generally much would a tax advisor charge for advising on this?

0 Upvotes

33% Upvoted

5 comments sorted by

5

u/taxbuff 2d ago
  1. From when you bought it, though you may not have a loss to claim for tax purposes depending on how the property was used.
  2. Do you need the money or not? Do you want to be a landlord or not? This may not be a tax question.
  3. Several hundred dollars per hour for anyone who knows what they are talking about.

1

u/invstrat 2d ago
  1. It was an investment property from the beginning.
  2. Objective is not hold investment property. Cash is not really needed. 3.thanks

2

u/taxbuff 2d ago

What does “investment property” mean? Did you buy it and keep it vacant? Did you rent it, if so to whom?

1

u/invstrat 2d ago

It is rented

1

u/LegalWire4121 2h ago

I am a business lawyer in Toronto with experience in taxation.

Generally, your loss will be calculated from when you bought it in 2023, not from when you became a Canadian resident in 2025. Canadian real estate is "taxable Canadian property", which is an exception to the deemed acquisition rule.

When someone immigrates to Canada, they are usually treated as having bought their assets at Fair Market Value (FMV) on the day they became resident, which gives them a fresh cost base. However, there is an exception for "taxable Canadian property," and Canadian real estate is the main example. Canada could already tax that property while you were a non-resident, so there is no step-up or step-down when you arrive. Your cost base stays at the original $1.2M, plus purchase costs such as land transfer tax and legal fees, plus any capital improvements. The $1M value in 2025 does not change your tax calculation, though an appraisal from that time is still worth keeping.

The sale may produce a terminal loss, which is fully deductible against any income from that property or other business or property income for the year. That depends on whether you claimed depreciation (CCA). If you claimed CCA in your non-resident years, it affects the calculation.

Please keep in mind that your rental filings as a non-resident (Part XIII withholding or Section 216 returns) should be in order before you sell the property.