Lloyd Dyson
asked
Lynne Butler:
Hi, I recently moved to Newfoundland with my wife where we purchased a house. I have elderly parents in Ontario that own their house and since I'm an only child, they have left everything to me. I'm also the POA. When the last of my parents passes on do I have to pay taxes on their house or my current house when I sell either?. Thank you. Lloyd
Lynne Butler
Hi Lloyd,
If your parents only own one property, it's their principal residence. This means they pay no capital gains tax on it when they pass away. The only tax you should run into at the time your parents' house passes to you is the provincial probate tax (about 1.5%).
Going forward, if you own two properties, only one of them is your principal residence. Therefore only one is free of potential capital gains tax. If you keep your parents' house and later sell it, you will pay capital gains tax on it if it has increased in value during the time you owned it. Assuming that your own home in NL is your principal residence, you will not pay capital gains tax on it when you sell.
Owning one house is not a tax issue. Once you own a second one though, things get more complicated.
Hope this helps.
Lynne
If your parents only own one property, it's their principal residence. This means they pay no capital gains tax on it when they pass away. The only tax you should run into at the time your parents' house passes to you is the provincial probate tax (about 1.5%).
Going forward, if you own two properties, only one of them is your principal residence. Therefore only one is free of potential capital gains tax. If you keep your parents' house and later sell it, you will pay capital gains tax on it if it has increased in value during the time you owned it. Assuming that your own home in NL is your principal residence, you will not pay capital gains tax on it when you sell.
Owning one house is not a tax issue. Once you own a second one though, things get more complicated.
Hope this helps.
Lynne
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