Hi Ziad,
Thank you for reaching out and for providing the detailed background of your situation.
Based on your description, it sounds like your residency status changed partway through 2024, which has important tax implications—especially regarding the sale of your former primary residence.
Here’s how we recommend approaching the situation:
1.Departure Tax & T1161
Since you’re filing as a resident for 2024 and planning to sever ties mid-year, it’s appropriate to include Form T1161 (List of Properties by an Emigrant of Canada) with your 2024 return. This notifies the CRA of your departure and any assets you still own. You may also need to complete Form T1243 (Deemed Disposition of Property) and Form T1244 (Election), depending on your situation.
2.Principal Residence Exemption (PRE)
You may be eligible to claim the PRE for the period during which the home was your principal residence (2019 to 2023, and possibly part of 2024). We will need to analyze this carefully to determine the exempt portion of any capital gain on the sale.
3.Rental and Non-Resident Status
Once the home was rented in September 2024, it may no longer qualify as your principal residence beyond that point. When you do sell the property, as a non-resident of Canada, you are required to:
- File Form T2062 (Request for a Certificate of Compliance) with CRA before the sale or within 10 days after.
- Pay 25% of the gain as withholding tax (based on the gain calculated from the FMV at time of departure vs. sale price).
4.Retrospective Appraisal
It’s great that you have obtained a realtor’s opinion of value. This appraisal will help establish the FMV at the time of your departure from Canada, which becomes your new cost base for calculating the capital gain.
Next Steps:
I’d be happy to assist with:
- Preparing your 2024 personal tax return including departure reporting
- Filing the T1161 and any required departure forms
- Completing the T2062 for the property sale
- Ensuring proper tax planning to minimize tax and claim the principal residence exemption where available
Let me know if you would like to proceed and I can provide a quote for our services. If you have a closing date in mind for the property sale, please let us know as soon as possible, so we can file the T2062 on time and avoid late penalties.
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