Sell principal residence to move the money to Canada after being approved as PR

[longvh]

Searched for several hours without finding the answer. Need your kind help with the case:
- Being Canada residents for tax purposes (under Study Permit and Work Permit) since 2020.
- Got PR status in 2023.
- Just sold a principal residence (> CAD 100k) in 2023 to move the amount to Canada via bank transfer (personal use only, no rent, no income, owned since 2015 before moving to Canada in 2020).
- Assuming no capital gain for the property (with evidence of sold price ~ acquired price).

With the definition of principal residence and such evidence, do we have to submit T1135 when filing 2023 tax?
Can we use the money for a down payment right after it's available in Canada?

Thanks in advance.

 

[steaky]

Searched for several hours without finding the answer. Need your kind help with the case:
- Being Canada residents for tax purposes (under Study Permit and Work Permit) since 2020.
- Got PR status in 2023.
- Just sold a principal residence (> CAD 100k) in 2023 to move the amount to Canada via bank transfer (personal use only, no rent, no income, owned since 2015 before moving to Canada in 2020).
- Assuming no capital gain for the property (with evidence of sold price ~ acquired price).

With the definition of principal residence and such evidence, do we have to submit T1135 when filing 2023 tax?
Can we use the money for a down payment right after it's available in Canada?

Thanks in advance.

T1135 is a form used to reporting the taxpayer of all specified foreign property for more than $100,000 Canadian, so you have to submit T1135 when filing 2023 tax. I assume you report zero income and zero gain/loss. You can use the money for downpayment after it's available in Canada.

 

[armoured]

- Just sold a principal residence (> CAD 100k) in 2023 to move the amount to Canada via bank transfer (personal use only, no rent, no income, owned since 2015 before moving to Canada in 2020).
- Assuming no capital gain for the property (with evidence of sold price ~ acquired price).

Just to clarify - you can look up details in the tax filing instructions - you will provide an estimated market value as at the date of your immigration to Canada (in Canadian dollars) when you file as a new immigrant. Basically that's treated as your 'acquisition price' for Canadian tax purposes. [I think that's in the t1135 but not going to look it up]

On disposal of that foreign property, that's the basis for which the gains/income will be calculated (sale price minus that declared/market value as of date of immigration).

So unless you've seen a big gain in that interim period (which, I don't know, because of some wild currency movement?), shouldn't create a significant tax event.

And generally I would guess canada revenue agency would not be challenging those estimated market values and hence the (lack of) gains if within a single calendar year. In other words you shouldn't have too much to worry about.

[Obviously any tax issues/treatments in country of origin are your own to deal with.]

 

[longvh]

Just to clarify - you can look up details in the tax filing instructions - you will provide an estimated market value as at the date of your immigration to Canada (in Canadian dollars) when you file as a new immigrant. Basically that's treated as your 'acquisition price' for Canadian tax purposes. [I think that's in the t1135 but not going to look it up]

On disposal of that foreign property, that's the basis for which the gains/income will be calculated (sale price minus that declared/market value as of date of immigration).

So unless you've seen a big gain in that interim period (which, I don't know, because of some wild currency movement?), shouldn't create a significant tax event.

And generally I would guess canada revenue agency would not be challenging those estimated market values and hence the (lack of) gains if within a single calendar year. In other words you shouldn't have too much to worry about.

[Obviously any tax issues/treatments in country of origin are your own to deal with.]

Great. So I'll look for the estimated value in May 2023, and compare it with Nov 2023 (when we sold it). Then that will be the case.
Thanks for your help.

 

[armoured]

Great. So I'll look for the estimated value in May 2023, and compare it with Nov 2023 (when we sold it). Then that will be the case.
Thanks for your help.

If it's real estate, I think the expectation that almost anyone would have is that it would not generally change much in value within a calendar year. In other words, bluntly, you won't be risking much to put a value fairly close to what you sold it at.

[My comment about currency movements may be true, but in practical terms you can probably ignore - I doubt CRA spends much time on that in such cases]

 

[steaky]

If it's real estate, I think the expectation that almost anyone would have is that it would not generally change much in value within a calendar year. In other words, bluntly, you won't be risking much to put a value fairly close to what you sold it at.

[My comment about currency movements may be true, but in practical terms you can probably ignore - I doubt CRA spends much time on that in such cases]

Like stocks and currency movement or conversion rates, the value in real estate can change much within a calendar year. You might see real estate prices significantly cheaper or significant more pricier if you compare with quarter 1 and 4 of the calendar year.