property outside canada

[har73]

Hello friends,
I m moving to canada on pr basis in july and having property in india. After getting my pr card, I am planning to coming back india for a month to sold out my property and transferring money to canada...my question is will I have to pay any taxes on selling my property in india?

 

[hobbes]

Generally, any capital gains that you make are taxable in Canada, irrespective of where they are made.
However, the cost basis of your property will be the fair market value on the day you arrived. So your capital gains will be:

Sale value of property minus Cost of property on the day you arrive,
which can be assumed to be zero since there is only a month's difference between the two dates.

You won't have to pay any taxes to Canada.

 

[har73]

Thanks dear.

 

[Amadan123]

Your taxation in Canada depends on whether or not you have established residential ties to Canada. Residential ties are of two types: primary and secondary. Presence of a primary tie will deem you a resident of Canada; presence of multiple secondary ties can deem you a resident of Canada.

You will be taxed in Canada for your worldwide income if you are deemed a resident of Canada for tax purposes. As such, it is extremely crucial that you analyze your ties to determine your status. The last thing you'd want to do is engage in the capital gain transaction without understanding/mitigating your tax risks.

This is a sensitive matter, and you should get someone qualified to study your situation carefully.

Madan Chartered Accountant team
www.madanca.com

 

[smed74]

Dear All,

I have a similar situation since I have got a property outside Canada. I have following questions,

1. Which form do I use to declare the value of property ?

2. Can I declare it in 2014 Personal Tax Credits Return (TD1) form? If yes, then in which row specifically.?

I would be moving to Canada next month in July after a year. I had landed as immigrant in Jan-2013 and got PR card in around 45 days and then left Canada. I would appreciate your response.

Thanks & Regards,

 

[steaky]

1) T1135

 

[Amadan123]

Hello,

You do not have to prepare a T1135 in "the year in which the individual first becomes a resident of Canada (section 233.7 of the Act)."

However, you should speak to the CRA regarding your situation, especially since you initially came to Canada in 2013 and left, and are returning once again.

Madan Chartered Accountant team,
www.madanca.com

 

[smed74]

Hello Amadan123,

Thanks a lot, so I simply have to declare the property value while filing Taxes for 2013, and there is no need to fill up the document T1135.

Regards

 

[Amadan123]

It is hard to conclude based on the limited information. As a general rule, if this is the first year for an individual as a resident of Canada for tax purposes, then a T1135 is not required. This is the form on which the foreign property/fund information is reported.

Madan Chartered Accountant team,
www.madanca.com

 

[har73]

If I held my house back in india, from that I have no income...should I have to pay any tax in canada?

 

[steaky]

If I held my house back in india, from that I have no income...should I have to pay any tax in canada?

Yes, you must report any capital gains.

 

[Amadan123]

As a resident of Canada for tax purposes, you would have the obligation to report and pay tax on any rental or capital gain income earned from this house.

Incidentally, please do check out the Income Tax Folio on principal residences, such as homes.

http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f3/s1-f3-c2-eng.html#N102A1

Please have a read of it, and call the CRA at 1-800-959-8281 if you have any further questions. The agents can help out.

Madan Chartered Accountant team
www.madanca.com