Personal Property change of use to Rental Property

[Craig M]

Hello,

We lived in a Vancouver apartment until moving to Victoria.
We bought a home in Victoria late 2021.
 

We began renting out the apartment in Vancouver in November 2023.
I understand this is considered a deemed disposition.

I understand this would mean the need to make a choice of designation of principal residence between the two places.
What area/form of UFILE deals with the deemed disposition of the apartment? (It did not ACTUALLY sell)

 

[Geo123]

Hello Craig M,

apartment conversion to rental

Rental - Changing all your principal residence to a rental or business property - subsection 45(2

When you change your principal residence to an income producing property, such as a rental or business property, you can make an election not to be considered as having started to use your principal residence as a rental or business property. This means you do not have to report any capital gain when you change its use. If you make this election:   //  To make this election, attach a letter signed by you to your income tax and benefit return of the year in which the change of use occurs. Describe the property and state that you want subsection 45(2) of the Income Tax Act to apply. 

If a Quebec tax return is also being filed, a copy of the election should be sent to Revenu Quebec.

Upload this letter to your CRA workspace before netfiling your return.  Describe the property and state that you want subsection 45(2) of the Income Tax Act to apply.

 

//

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/principal-residence-other-real-estate/changes-use/changing-your-principal-residence-a-rental-business-property.html

[Craig M]

Hi Geo,

My understanding is that by making an election in 45(2), it would 'keep' the original principal residence to be considered that.  The new property would not be able to be considered principal residence for the same time period.
This is no ideal.

I was hoping to deem the original property as principal residence up until the time it was rented out, and have the new property be considered principal residence after that.