I purchased a pre-sale condo 3 years ago with the intention of living in it. Fast forward a couple years.. it's ready for completion soon but I have accepted a job out of town and I need to sell my condo. I will have maybe 2ish weeks in it before I leave and need to put it up for sale. Can I still claim it as my primary residence and not pay capital gains - there doesn't seem to be a minimum time required to live in it. My other option would be to keep it for 6 months and rent it out before selling.. but then that complicates things even more.
Careful consideration should be taken if you choose to claim the Principal Residence Exemption on your condo which you never lived in, especially if you make a profit on the sale of it. There are numerous articles out there that refer to the Canada Revenue Agency audit initiative which is targeting taxpayers who have recently sold condominium units they did not occupy or occupied for only a short period of time (the “CRA Condo Project”).
Although you may be able to prove your case and they would accept this as your Principal Residence and allow the exemption, it may be just as easy to report it as a disposition if the property has not increased in value and your capital gain is minimal.
http://www.canadiantaxlitigation.com/sales-of-condominium-units-under-audit-by-canada-revenue-agency