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Capital expenses for personal use property


PeteH
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Hello, 

Just wondering if one can add capital expenses to cost basis for a personal use property (ie. principal home) - I am aware capital or current expenses cannot be deducted for a personal use property, but I was wondering if for example you replace roof/front door in a principal home, can you apply these expenses to the cost basis (ie. higher cost basis) in the year of disposition? Since one still needs to report capital gain on principal home at disposition.

Thanks in advance,

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Hello PeteH,

(1.) Generally the personal use property (ie principal home) is exempt from capital gains due to the Principal Residence Exemption (PRE) see link for details and rules) :

Per the When you sell your home or when you are considered to have sold it, usually you do not have to pay tax on any gain from the sale because of the principal residence exemption. This is the case if the property was solely your principal residence for every year you owned it.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/principal-residence-other-real-estate/sale-your-principal-residence.html

(2.) For property other then the above PRE capital costs / expenditures can be added to the acquisition cost for the capital gain (loss) calculation

 

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