The most important tax fact for Ontario homeowners to know is that the sale of your principal residence is exempt from capital gains tax in Canada — meaning most homeowners pay zero tax on the profit from selling their home. However, there are important exceptions, and Flowers Team Real Estate always recommends consulting a tax professional for your specific circumstances.

Principal Residence Exemption

If the home you are selling has been your principal residence for every year you have owned it, you qualify for the full principal residence exemption and owe no capital gains tax on the gain.

Situations Where Tax May Apply

• Investment properties — capital gains tax applies on the profit from selling a rental or investment property. In Canada, a portion of the capital gain is included in income and taxed at your marginal rate.
• Partial use as rental — if you have been renting part or all of your home, the rental portion may be subject to partial capital gains tax.
• Flipping — homes sold within 365 days of purchase are treated as business income under the Residential Property Flipping Rule, meaning 100% of the profit is taxable.
• Non-residents — non-residents selling Canadian real estate are subject to withholding tax under the Income Tax Act.

This is not tax advice — always consult a qualified accountant or tax lawyer for your specific situation. Flowers Team Real Estate ensures sellers understand the general landscape and connects them with trusted professionals when needed. Contact us to discuss your selling situation.