Do I have to pay capital gains tax when I sell my home?
Sell Your Burlington Home? You probably won’t owe capital gains tax — here’s when you might and exactly what to do.
Why you can relax (most of the time)
In Canada, your main home is usually protected by the principal residence exemption (PRE). If your house in Burlington was your principal residence for every year you owned it, the capital gain on the sale is normally tax-free. That means most Burlington homeowners who actually lived in their house won’t pay capital gains tax when they sell.
When you could owe tax
There are clear situations that trigger capital gains tax:
- You rented out the property, ran a business from it, or had a “change in use.” Partial or full years of non-residential use can reduce the PRE.
- You owned multiple properties and your family designated a different property as the principal residence for the same year. Only one property can be designated per family unit per year.
- You sold a property that was primarily an investment rather than your principal residence.
Quick facts Burlington homeowners need to know
- Capital gain calculation: proceeds of disposition minus adjusted cost base (purchase price + eligible improvements) minus selling costs (legal fees, real estate commissions).
- Inclusion rate: Canada taxes 50% of a capital gain, but the PRE can exempt that gain.
- Reporting: Since 2016, you must report the sale on your tax return and claim the PRE — usually on Schedule 3 and the CRA forms that apply. Don’t skip this; reporting confirms the exemption.
Action plan — what to do before you list
- Confirm primary residence status. Document when you lived there: utility bills, driver’s license, voter registration.
- Gather cost records. Keep purchase price, receipts for renovations, and seller expenses.
- Check use history. If you rented or used part as a business, calculate the portion used for income.
- Talk to a tax pro if you had rental income, periods of non-residence, or multiple homes.
- Price and sell smart. A correct market value and low selling costs help you maximize the exempted gain.
Local tip for Burlington, ON
Burlington’s market moves fast. A correct sale date and documented occupancy matter. If you turned your Burlington home into a rental while prices climbed, the timing of when you converted back to a principal residence can affect how much of the gain is taxable. Local valuations help justify your numbers to the CRA.
Why work with a local expert
You don’t need a national script. You need local answers, numbers and paperwork. I provide clear valuations, walk you through the principal residence rules, and coordinate with tax pros to protect your proceeds.
Ready to get it right? Email tony@sousasells.ca or call 416-477-2620 for a free chat about your sale plan in Burlington. Visit https://www.sousasells.ca to learn more.
