Buy Properties in other province

[boytwice]

I am sorry, if i ask some stupid questions, but i do want to know more before i try to acquire properties in other province.

Let say if i Currently reside in Ontario, and if i buy a properties in NB. is there regulations at all? For examples, i heard other said that you cannot resell the properties in higher value if you are not living in that province, or else, you need to pay a huge tax. Is that true? Thanks for advice.

[Pfm1011]

I only trade in ontario so I could be wrong but I think you are just talking about capital gains tax. Since the property is not your primary residence you have to pay capital gains. 

It doesnt matter if you are in or out of province and I dont think any province has a "non resident" tax penalty.

[Josh]

PFM1101 is right. there are no regulations against owning multiple properties in multiple jurisdictions.  He is also correct about the capital gains tax that you will have to pay, the good thing about capital gains is that they are taxed at a lower rate than other incomes, approximately 25% if you are in the top tax bracket.

[Dunmar]

What tax does the investor pay upon the sale of an investment real estate property in Canada?

In certain circumstances, the capital gain when selling the property can be exempted using the principal residence exemption.  If you sell the real estate property for more than it cost (and it does not qualify for the principal residence exemption), this will be taxed as a capital gain. 

Upon the sale of an investment real estate property, any net increase in the value of a property is taxed in the form of capital gains which is the preferred form of income from a tax perspective.  In Canada, capital gains have preferential tax treatment as compared to interest and dividends because only 1/2 of the capital gain is included in taxable income.  An Ontario investor in the top marginal tax bracket would pay 23.21% tax on capital gains, versus 46.41% on employment, business, or interest income, or 31.34% on dividend income.

For additional information regarding the taxation of rental income please refer to the Canada Revenue Agency Guide for Rental Income.