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If I sell my condo (an investment property, not my primary residence) then I imagine I need to pay tax (provided I make a profit).

If I don't make profit, can I use the loss against my salary income to reduce my income taxes?

If I do make a profit, am I doomed to pay tax at the marginal tax rate? If I make a decent profit, I imagine the RRSP contribution room is not enough to keep all my profits in there.

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  • Is this your primary residence? I didn't think Canada levied tax on capital gains from the sale of primary residences.
    – John Bensin
    Sep 26, 2013 at 18:42
  • No this is my investment property. My primary residence is a rental, which is cheaper than the rent of my condo :)
    – Victor123
    Sep 26, 2013 at 18:44

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No. If this is an investment property, it is subject to capital gains tax rather than being taxed at your marginal tax rate. This is almost certainly better for you; capital gains are generally taxed at half your marginal tax rate.

MoneySense has an article that goes into substantially more detail, discussing the principal residence exemption (which does not apply here), and when exactly a house is considered an investment property.

Generally speaking, it will almost certainly be worth hiring an accountant here.

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  • In Canada would any capital losses be carried forward to future income years for potential reductions to future capital gains rather than reduce income tax in that year?
    – Victor
    Sep 26, 2013 at 21:14
  • @Victor Yes -- in Canada, capital losses can be carried forward indefinitely, as well as backwards three years. (source)
    – Chris W. Rea
    Sep 26, 2013 at 22:14

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