According to Canadian laws for property, different taxes and formulae apply for different forms of property. You are not required to report income tax if you sell a property which happened to be your principal residence throughout the period you owned it.
What is a principal residence?
Panda Condos is the best condo project for 2017, people were waiting for this project since 3 years but it took long because of the lengthy approval process in the city of Toronto. A house, an apartment in an apartment building, a condominium, a cottage, a duplex, a trailer, a mobile house or a boat house; they all can be your principal residence. There are certain conditions that, if met, make a property to be a principal residence. These conditions are:
* It is a housing unit, or a share of the capital stock of a co operation which you acquire for the sole purpose of inhabiting that housing unit, or a leasehold interest in a housing unit.
* You own the property or in collaboration with another person.
* You designate that property to be your principal residence.
* You, your ex or current spouse, or partner, or any of your children lived in that particular housing unit during any part of the year.
According to law, the land which comes with your housing unit can also be included in principal residence. This land can be approximately 5000 square meters or 1.24 acres. There are exceptions for this available though, if you want to show that you need extra amount of land in order to enjoy your lifestyle.
Sale of the principal residence.
In Canada, You are not required to report income tax if you sell a property which happened to be your principal residence throughout the period you owned it. Similarly, if you face loss while selling your principal residence, you are not eligible to claim refund for its loss.
In case your property was not your principal residence for every year you owned it, you have to report the capital gain for those particular years in your income tax report.
In case a part of your property was your principal residence, when you will sell it, you have to report and pay tax on the income report of the other part that was used for income purposes e.g. rent or business.
If you happen to be a farmer, and sell your farming land that includes your principal residence, only the part of the land used in farming is taxable after sale. This can be measured in square meters.