Starting for the 2016 tax year, filing in April 2017, homeowners will need to report the sale of their principal residence on their tax forms.
While there are not any changes to the principal residence capital gains exception itself, the reporting requirements will affect your planning should you own two or more properties anywhere in the world. Your principal residence can be any of the following types of housing units:
Maximizing your investment returns requires due diligence and expert advice. Always rely on an experienced professional. Effective October 17, 2016 home buyers that require mortgage insurance (purchasing with a down payment of 20% or less) will now have to pass a ‘stress test’ to qualify for a mortgage at the Bank of Canada 5-year benchmark rate instead of the current lender’s rate. This difference in the qualifying interest rate from the actual rate, about 2%, will reduce the amount a person may qualify for a mortgage by up to 20%. Before this change, a family with $100,000 annual income could qualify for a mortgage around $580,000 and now may only qualify for a mortgage of around $490,000 since their mortgage eligibility is based on the 32% gross income to housing costs rule. Here is a breakdown of how the new rules would affect a monthly payment on a home valued at $700,000.
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