My wife and I built a home 3 years ago which was our principal residence and we sold it a year after due to it being a bit to small for our liking. We moved in with our in-laws and built a new home which we moved into a few months ago which is now our principal residence. We sort of settled on the property as there wasn’t much around and we don’t want it to be our forever home so I’d just like to know how long we should keep this home before selling in order to be certain we won’t pay capital gains. If a property comes up that we absolutely love I just don’t want to miss out on it so I am just curious what I should do.
There’s no time restriction. As long as it was your principle residence the entire time you owned it, and you didn’t rent out any part of it, you won’t pay capital gains on the sale. However, be aware that if you buy/sell homes frequently, this may cause the CRA to review your transactions, as they don’t want the principle residence designation to be abused by “house flippers” and others whose primary motive is profit.
Thank you for the response! So how will they judge whether or not it’s too frequent. Essentially I’ll have built and sold 2 houses in about 3 years. Which are our only 2 homes. We would like to build one final home that we absolutely want and that we will stay in forever. I anticipate having a gain of around 400,000 so obviously I don’t want to end up getting taxed on that amount.
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