A capital gain is the increase in market value of a property. if a property is rented and being used as an investment vehicle the Canada Revenue Agency (CRA) will want to tax any increase in value from when the investment property was purchased to when the property is sold. Your principal residence sale is generally exempt from capital gains taxation. A formal appraisal by a member of the Appraisal Institute of Canada serves as the best evidence of this value, as government entities and the court system typically only accept formal appraisals completed by a designated appraiser. Converting a principal residence to a rental property most often leads to this scenario. The Canadian National Appraisers have extensive experience with this type of appraisal assignment and will provide you with a comprehensive written report that clearly explains the valuation analysis and conclusion. Ideally, you will obtain a current market value appraisal at the time of conversion from principal residence to income property. Otherwise, you will need a retrospective appraisal that estimates the property's value at the time of conversion. |