Personal tax accountant in Aldergrove

The exemption has to be reported, not just relied on

Selling a home that qualifies as a principal residence throughout the period of ownership generally produces no tax. What changed some years ago is that the disposition must still be reported on the personal return for the year of sale, with the property identified and the designation made. Failing to report it is not a technicality — the exemption can be reduced or denied where the designation is not made, and late-filing penalties can apply. A surprising number of otherwise careful people sell a home, correctly conclude no tax is owed, and file a return that does not mention it at all.

Land beyond the ordinary limit

The exemption covers the housing unit and the land underneath it, plus adjoining land up to a defined area that is regarded as contributing to the use and enjoyment of the home. Land beyond that area is generally excluded unless it can be shown to have been necessary for the use and enjoyment of the residence — for example where a municipal minimum lot size made a smaller parcel impossible. On an Aldergrove acreage that is not an abstract point: the excess land can represent a substantial share of the sale price, and the position is far easier to establish with zoning and subdivision records gathered while the property is owned than with recollections offered afterwards.

Running a business from the property

Claiming part of a home against business income does not by itself disqualify the exemption, provided the use is ancillary to the main use as a residence, no structural change was made to accommodate the business, and no depreciation is claimed on the building. Those three conditions do real work. Claiming capital cost allowance on the portion used for business is the classic way an owner converts a fully exempt home into a partially taxable one in exchange for a modest annual deduction, and the trade is almost never worth it. See the principal residence exemption and business use.

Change in use is a deemed sale

Where a property, or part of one, changes from personal use to income-producing use or the reverse, there is generally a deemed disposition at fair market value at that moment even though nobody was paid anything. Converting a home into a rental on moving out, or converting a rental back into a home, both trigger it. Elections exist that can defer the consequence in defined circumstances, and they have deadlines. The common failure is that the change happens quietly — a family moves and keeps the old house — and nobody identifies the event until a sale years later forces the question. See the change in use rules.

Which entity should claim the home costs

Where the business is incorporated, the home is owned personally and the corporation is a separate person, so a claim usually runs through a reimbursement or rental arrangement rather than the corporation simply deducting a share of household bills. That arrangement has to be documented and has to be consistent with what the personal return shows. Rent charged to one's own corporation is income on the personal side, which is a point owners frequently discover after the fact. See home office expenses for incorporated owners.

What is covered

One Chartered Professional Accountant handles the whole file:

• Principal residence designation and reporting on the year of sale
• Excess land analysis and the records that support it
• Business use of home structured to preserve the exemption
• Change in use identification and available elections
• Coordination between the personal return and the corporation

Remote, and there is no Aldergrove office

EverStone has one office, in Abbotsford, and no Aldergrove location. Everything runs online — video meetings, e-signature and secure upload — which for a file built largely from property documents is the more practical arrangement.