Each year I help over 500 clients file their Canadian and US tax returns as well as plan for both their Canadian and US investment accounts. I also regularly help new US clients plan for their move to Canada.
I have owned a residence on Vancouver Island since 2003. I used it as a seasonal residence for myself and wife (our two sons were born in Canada) until 2007 when I took a Doctoral program in my field in Traditional Chinese Medicine in Victoria.for two years until 2009. Shortly before my student visa expired in September of 2009 we applied for landed status. Our application and subsequent resubmission was rejected and sadly we appear to have no further option but to return to the US.
Our home is on the market and we are facing a retention of 25% of the gross proceeds at the sale for capital gains tax unless we can show the notary a clearance letter from Revenue Canada.
My question is: since we lived in the home for 2 years while on a student Visa (since then on Visitor Record) will we be liable for capital gains tax since we do not have landed status and what, if any, are our options?v
Your only option is to complete a T2062 and submit 25% of the actual (proposed) gain on the property to CRA. Then you file a s.115 Canadian tax return to potentially recover some of the tax. You should be able to receive an exemption for the 2 years you lived in the house (possibly).
Also note that your gain should be adjusted for the time spent as your principal residence. This revaluation most likely happened when you left Canada
I charge $200 for the T2062 and $300 for the s.115 return T1 return next February.
If you need me to prepare these forms please give me a call.
Phil Hogan, CA