Thank you for choosing TurboTax. Assuming that you sold off your principal residence property. Unfortunately, Canada does not allow you to deduct personal mortgage interest. ... You get approved for a certain amount, and take out the mortgage to buy your home. But as you pay down the principal on the debt, that line of credit doesn't go away.
If you sell an asset for more than you paid for it, the profit is called a capital gain. Details of the sale are included in your tax return (Schedule 3) and capital gains tax is usually applied. When you sell your principal residence (the home where you and your family live throughout the year), the details of the sale are still included in your tax return but, in most cases, any profit you’ve made is exempt from capital gains tax.
There are exceptions to the principal residence exemption. Capital gains tax may apply to the sale if
- Your home hasn’t been your principal residence for all the years you’ve owned it, or
- You’ve used part of your home for income (business or rental)
When you sell of any property regardless of the title (principal residency, rental, or investment property) if you have gains from that property and you used that to pay off your remaining mortgage that will not be considered as your expense but the gains should be reported under Schedule 3, and on form T2091 (IND).
Please check out our blog on: Reporting the Sale of Your Principal Residence
As per CRA: Reporting the sale of your principal residence for individuals (other than trusts)
You can also check out the following listed blogs for further clarification:
What Can I Claim When Selling a Home?
Dos and Don’ts: CCA for Rental Property Explained
Capital Gains and Selling Your Home
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