I own a house, live main flr and rent out basement. How small is the rental % in relation to overall house to exempt the “capital gain tax” for the full property? 25%? or
I own a house, live main flr and rent out basement. How small is the rental % in relation to overall house to exempt the “capital gain tax” for the full property? 25%? or
My rented out basement has living room, bathroom, kitchen stove; but no bedroom. I saw similar question posted in this community. But the previous answer did not say "how small is small", 25%, 30% or 20%, or ? of the (main flr+basement).
I own a house, live main flr and rent out basement. How small is the rental % in relation to overall house to exempt the “capital gain tax” for the full property? 25%? or
CRA does not have a specific percentage stated when determining the eligibility of the exemption of rental use and your principal residence. It is therefore up to the taxpayer to use their own judgement and be able to back up the reasoning behind the exemption based on your own individual circumstances.
If you are only renting out a small portion of your property and the rental is incidental to the overall use and purpose of the property it will not impact the tax-free Principal Residence Designation. However you must report the income related to the rental (claiming reasonable expenses) and not claim capital cost allowance on the rental unit.
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