Should land transfer tax be included in the adjusted cost base for my principal residence which I bought in 2018 and sold in 2021?

Bought a Toronto condo in 2018 and paid land transfer tax on that purchase. I want to report the sale of this condo in my 2021 return. What should I include in the Adjusted Cost Base?

317

Level 4

Mar 21, 2022 4:24:50 PM

Yes, property tax transfer should be included in the Adjusted Cost Base (ACB) of your principal residence.

The Adjusted Cost Base(ACB) of an asset is the price you paid to acquire it. Additionally, you can usually include capital costs such as the cost of additions or improvements and legal fees as part of an asset’s ACB. The capital costs usually have a long-lasting effect such as adding a deck attached to an existing house. Some repairs are considered capital costs if they improve the property beyond the maintenance of the original use or value such as replacing a carpeted floor with a hardwood floor. If you have to repair the property anyway, the expenses are considered current costs. If these repairs are a condition for sale or to increase the price, then the expenses are considered capital costs.

For more information, please see our TurboTax article. Calculating Adjusted Cost Base

For more information, please see our TurboTax article. Reporting the Sale of Your Principal Residence

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Should land transfer tax be included in the adjusted cost base for my principal residence which I bought in 2018 and sold in 2021?