Personal Tax Strategy

Mackenzie tax tip of the month

Are you selling your house?

If you’re selling your principal residence, remember the capital gains earned from the property sale can be tax-free because of the principal residence exemption (PRE). Each family (you, your spouse or common-law partner, and any unmarried children under the age of 18) can designate just one property as a principal residence for each year.

If you own more than one property, you can choose which property to claim the PRE on, so long as you normally inhabit the property at some point each year (among other criteria).

If your family owns more than one property, which has appreciated in value, there could be tax payable on at least one of those properties in the future.

When you sell one of your properties, or on death when you are deemed to sell your properties, ensure you consider which eligible property has the highest amount of capital gain per year and designate that eligible property as your principal residence to minimize your tax bill.

Work with your financial advisor and tax professional to determine which eligible property makes most sense to use the PRE. If you have any questions, a tax professional can help you.

Mutual funds sponsored by Mackenzie Financial Corporation are only qualified for sale in the provinces and territories of Canada.

Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. Please read the prospectus carefully before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.