Living in condo during occupancy period and assigning it. No capital gains as principle residence.

[DogLover]

1 year time limit is a myth, the CRA can challenge you even if you lived there for 2 years. The longer you live there the less likely you will be audited, it also depends on your friends history.

 

[Princess62819924]

I have a friend living in his condo during the occupancy period and his only option to sell is to assign it. He fully intended to move and live there as his primary home and all of his accounts (bank, employee home address, etc) have been changed to there. Due to lending regulations that came into effect since initial purchase and before occupancy he is having a difficult time finding a lender to give him a mortgage.

He is, however, able to sell at a profit. Considering this is his principle residence, is he still exempt from capital gains given that every intention was to occupy as personal residence rather than as investments.

Any case tax law regarding this? Any advice? Any documentation he should be collecting incase the taxman comes calling afterwards?

If he assigns/sells the condo while in occupancy, he would not be able to claim the principal residence exemption. In order to qualify for the exemption you need to have legal ownership of the property, while in occupancy you don’t have ownership the builder does.