Whatever the case, numerous tax and legal considerations exist when you leave Canada — especially in the home selling process.

In this article, we talk about the many aspects of selling your home as you leave Canada and what you should consider.

Non-Resident Status

When you leave Canada to live in another country, you sever residential ties in Canada. This could mean selling your home, revoking your driver’s licence, or leaving clubs and organizations. As a result, you usually become a non-resident of Canada.

You become a non-resident for income tax purposes at the latest of:

• The date you leave
• The date your spouse or common-law partners and dependents leave Canada
• The date you become a resident of the country you settle in.

As a result, you aren’t obliged to pay all the same Canadian taxes as before. When you leave Canada, it’s best to speak with a tax professional to understand your obligations.

Departure Tax

One implication of becoming a non-resident is departure taxes — various taxes you must pay due to your departure.

When you leave Canada, the Canada Revenue Agency (CRA) deems you to dispose of certain types of assets at fair market value and reacquire them at the same price. This creates a capital gains tax that you need to pay. Accountants generally refer to this as a deemed disposition.

This deemed disposition on departure applies to properties like jewellery, paintings, and company shares (excluding TFSA or RRSP shares). So, your home is not deemed to be sold when you leave the country.

How to Notify CRA that You’re Leaving Canada for Good and File Your Canada Departure Tax Return

When you leave Canada, you need to file a departure tax return to notify CRA that you’re leaving. You generally need to file this tax return by April 30th of the year following your departure. The purpose of this tax return is to

• Record the date you leave Canada and change your residency
• Report the properties you own in Canada
• Prepare various tax forms
• Report and pay any departure taxes.

Leaving Canada and Your Principal Property

Capital gains are only taxable if you sell your home — suggesting it’s your principal property — when you’re no longer a resident. While, if you’re a resident, capital gains tax is generally exempt because your home is your principal residence.

When you depart from Canada, you usually have two options to deal with your principal property:

• Sell your property while you’re still a resident of Canada and have capital gains exempted through the principal residence exemption.
• Wait until you’re a non-resident to sell. In this case, the principal residence exemption is still generally available for the years in which you owned the property as a Canadian resident and fulfilled the other criteria for the principal residence exemption.

Selling Your Home as a Non-Resident

As a non-resident selling your home, you are liable to capital gains taxes because non-residents cannot access a principal residence exemption. In this process, you must notify CRA and complete Form T2062.

You’re generally liable to capital gains taxes in the years you’re a non-resident. For example, suppose you owned a home from 2003 to 2022.

• The home was your principal residence between 2003 and 2018.
• In 2018, you became a non-resident and moved out of the country.
• In 2022 you sold your Canadian home as a non-resident.

In this case, you’re likely liable to capital gains tax between 2018 and 2022 because the property was no longer your principal residence in these years.

Once the home is sold, you need to inform CRA of the sale within ten days after the sale closes. You make this notification through Form T2062. If you don’t, there’s usually a penalty of up to $2,500. The form requires you to estimate your capital gain or loss on the sale.

The property buyer may also assist in the tax collection process by withholding taxes from the due proceeds. This amount could be 25% of the purchase price being held up for months. So it’s best to be prepared for such a situation from a cash flow perspective.

When you sell your home as a non-resident, speak with a tax professional to understand your tax obligations. It will prevent surprises from hitting you in the face when you least expect them — like a 25% withholding tax on the sale of your Canadian property.

Repay Your Home Buyers’ Plan (HBP)

The Home Buyers’ Plan (HBP) lets Canadians withdraw from their registered retirement savings plan (RRSP) to buy or build their home.

Currently, the withdrawal is limited to $35,000, and you must repay the amount within 15 years. If you don’t repay the amount, it’s included into your RRSP income on your tax return, which could have significant income tax consequences.

If you choose to leave Canada, you need to repay your HBP or face an income inclusion for the amount. The balance of your HBP is payable on the earlier of:

• Before the date you file income tax for the year you become a non-resident;
• Sixty days after leaving Canada.

So if you’re planning to emigrate from Canada, it’s essential to ensure you have the funds ready to return whatever you borrowed from your RRSP to purchase your home. Otherwise, you’ll be on the hook for a lot of taxes!

Leaving Canada has many tax implications. Selling your home after you’ve left the country complicates this situation. If you’re leaving Canada or selling your home as a non-resident, it’s vital to speak with a tax professional and experience realtor to understand the implications of your decision.

The post Leaving Canada and Selling Your Property: What You Need to Know first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Downsizing allows homeowners to turn some of their home equity into cash by selling their current home and moving to a more affordable home or area. This move further helps reduce monthly bills such as heat and hydro, reduce the amount of cleaning and home maintenance, and possibly allows you to move to an area that’s closer to loved ones or with more green space.

If you’re considering downsizing your home, this article provides three tips on how to do so. The article goes over:

• What to consider to determine if downsizing is right for you and what the alternatives are;
• How to create a plan to declutter your belongings and prepare for moving to a smaller space; and,
• What you should consider when purchasing your next home.

Consider if Downsizing is Truly the Right Decision

Downsizing sounds excellent in theory. But there are numerous drawbacks that downsizing advocates don’t mention. It can be great for some but not for others.

A lot of people downsize for the financial incentive. However, one survey found almost 30% of downsizers said the cost of downsizing was more than expected. Selling your current home and buying a new one is an expensive process. There are numerous costs associated with it, including realtor commissions, legal fees, and home staging costs. You may also consider making a few renovations to maximize the amount you can sell your home for. This can range from a new paint job to a kitchen remodel.

There are also emotional costs to downsizing. Many older people have lived in their current homes for decades. They’ve grown accustomed to routines, the neighbourhood, the size of their home, and much more. Moving to a new space, community, or even city can be a massive shake up that you didn’t prepare for. Suddenly, you have to form new friendships with the neighbours or find a new coffee shop for your weekly brunch. The reduced space also means you’ll need to throw out a lot of your old belongings. And you won’t have as much space to entertain friends and family.

If you need additional funds for retirement but want to keep your home, an alternative is a reverse mortgage. A reverse mortgage lets you access your home’s equity without the need to move to a new home. This removes the potential costs and emotional risks from the equation.

Create a Plan to Declutter Your Belongings

The decluttering process can be challenging. Downsizing leaves you with less space than your current home, so it’s mandatory to relieve yourself of some possessions.

You can start the downsizing process before committing by decluttering your belongings. This means throwing out, giving away, and selling items that you no longer use. Throwing a yard or garage sale is a great way to go about this and bring in a bit of cash. This process can help you account for all the items in your home and reveal whether you have any deep attachments to specific things.

Once you decide you want to downsize and start looking at homes, you’ll want to develop a decluttering plan so that you’re not overburdened with deciding what to throw out later on. To do this, start with understanding what restrictions you’ll have. For example, how much square footage will your living space be reduced by? Next, list items that you must keep. This likely includes heirlooms, family photos, and the things you use daily. Give away, sell, donate, or store the items that aren’t on your “must keep” list.

Even if some items were expensive, there’s no point in keeping them around if you don’t use them. Hopefully, that item retained its value, and you can recoup some of its costs by selling it online.

Think of What Your New Home Needs for the Long-Term

Due to COVID-19, the condo apartment market in populous cities has declined in price and demand. This may be great news for the 32% of boomers looking to buy a a condo within the next five years. Some of these boomers may move in. But a condo apartment may not be the ideal living situation for everyone’s retirement lifestyle.

When you downsize, remember that this is where you may end up living out your golden years. You want a home with features and a neighbourhood that accommodates you now and 20 years down the road. For example, a walk-in tub or shower over a bath will be better if your mobility gets weaker with age. Living in a safe community with parks and nearby hospitals is also essential. Further, high-rise condominiums may not be the best choice. If elevators are not functioning, it may mean you need to take a flight or two of stairs, which become more difficult as you age.

Speaking to a real estate agent with experience in helping home sellers downsize is a significant help. These agents have the expertise to understand what to look out for to accommodate your current and future needs. They can also provide advice on the declutter and moving process.

Downsizing is a big move for anyone. It involves a lot of consideration in whether it’s the right choice, how to declutter your belongings, and what you’ll need for the long-term. But it also has many benefits such as extra savings and reduced maintenance for your home and lifestyle.

The post 3 Tips to Downsize Your Home first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Of course, the best-case scenario is to wait out the storm and to move once we return to normalcy. However, this isn’t always possible. Maybe a deal is too good to pass up on. Perhaps you need to relocate due to a purchase-and-sales agreement. Or perhaps it’s for work. Whatever the case, it’s evident that moving from an old home to a new one during the Coronavirus era is not a choice for some people. At the same time, there is a way to make the move safely. In this article, we look at what moving companies and truck rental services are doing to help you during this time. We also provide some tips to reduce the chance of contracting COVID-19 in the process of your move. 

How Moving Services and Rental Businesses are Ensuring Your Safety

Moving Services

If you’re hiring a moving company for your journey, it’s still possible. Most provinces have deemed moving companies an essential service. Further, as the number of new cases comes down, we’re starting to see a lot of businesses open again. With that said, moving companies are not just going on business as usual. 

One of the most significant changes is a move from in-person tours to virtual tours for pricing estimates. In a usual moving scenario, the movers would come to your home and take note of all the furniture and fixtures that they need to move to your new home. This provides the proper information to know what size truck to bring in, how many movers they’ll need, and what you can expect as a cost. But due to minimizing physical interaction in a COVID-19 world, mover now asks you to aid them in a virtual tour of your home as an alternative way to make their pricing estimate. 

Movers are also taking precautions during the actual move. However, they are limited in what protections they can use. While it’s ideal that movers wear masks and gloves, this protective equipment can interfere with their work. Gloves can ultimately reduce a mover’s grip and increase the chances that they drop something. This can not only damage your item but also injure the movers. Masks can also reduce the mover’s ability to breathe. And when they’re moving heavy furniture, a good airway is critical to safely maintain enough strength to hold heavy fixtures. 

Movers are requesting that you leave a washbasin open to them. As we know, washing our hands is more important now than ever before. Informing movers which sink is available to them and leaving some soap and hand sanitizer can help protect the movers, your family, and others. 

To prevent spread among different movers, companies are staggering when their employees come into your old and new home to reduce the amount of contact. Moving companies may also limit each truck to two people. 

Truck and Container Rentals

Opting to move without a moving company can be a safer option because it involves fewer people you don’t know. However, you’ll likely still need to rent a truck or container. Companies such as U-Haul are taking strict measures to sanitize their vehicles. They disinfect everything from steering wheels, seats, and seat belts. Additionally, many have implemented six-feet distancing guidelines when individuals come to their stores. Online check-ins for some companies are also available to further reduce contact with any truck rental company staff. 

What You Can Do to Ensure a Safer Move During COVID-19

As mentioned before, if you’re using a moving service, one of the best things you can do is provide the movers with a washbasin and soap. But there are additional steps you can take to secure yourself and your family further:

• If you want to monitor your home as movers come in and out, limit it to yourself or to one family member. Ultimately, limit the number of people present. 
• If your movers are comfortable using protective equipment on the job, a poncho is an additional step to ensure that there’s even less contact between them and your items/home.
• Pack whatever you can yourself. This can limit how many people touch your possessions. 
• Ask your moving company what health measures they have in place. Ensure that they’re sanitizing their trucks and equipment and staggering their staff as they enter and exit your home. 
• Disinfect any hard surfaces. 
• Provide movers with precise instructions on the layout of furniture in the new house. This can prevent the amount of time they need to spend at the property. 
• Prepare separate bags with clothes that you can use for the first week at the new property. This can help prevent the need to open your other clothing boxes. 

Additionally, it’s common that you’ll want to declutter the number of possessions you have during a move. Although it’s commonly a great time to bring some no longer used items to a donation bin, the Coronavirus pandemic has resulted in the closure of donation bins. Friends and family may also be wary of accepting any second-hand items as a precaution. Therefore, many of your no longer used possessions may end up in a recycling bin or landfill. Although this is unfortunate, it’s part of limiting the spread of COVID-19. 

There’s no doubt we’ve entered a new normal. In an ideal world, try your best to delay moving until the situation gets better. But for some, there’s no choice but to move to a new location. If you’re in that situation, know that moving companies and rental businesses are taking measures to make your move as safe as possible. Additionally, your own precautions, such as preparing clothing and home layouts, can help reduce the chance of COVID-19 spreading. 

The post What You Should Know If You’re Moving During COVID-19 first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

With spring just around the corner — she says, hopefully, in -27 C weather — we are quickly approaching moving season. Hard to believe that time is going by so quickly, she says, again, adjusting her toque and scarf.

June through September tend to be the most popular months to move, according to the Canadian Association of Movers, but we all know there are some eager beavers who may score some potential savings by moving during the unpredictable months leading up to peak season.

Regardless of when you decide to make the grand transition, there is a lot of stress that comes with it. There are a lot of moving parts and it’s all happening at once and the whole experience can feel pretty chaotic. But, there is a secret. Well, it’s not really a secret, we all know it, it’s just sometimes hard to practice than to preach it. The secret is — drumroll, please — PREPARATION!

Here are a few tips to help you break this gargantuan task into smaller, attainable tasks.

First things first: congratulations on your move! This is an exciting time — despite all the craziness — and I hope you take a moment to really appreciate it all. Take it all in. Next, it’s time to map out a plan. Grab that notebook and let’s draw the blueprints for plan “Moving Possible”. 

PLAN AHEAD, GIVE YOURSELF TIME

Remax suggests planning a move at least six weeks in advance is best. By giving yourself plenty of time, Remax says, you can give yourself the time necessary to “edit” your belongings. This way, you are only moving the things you actually want to keep and use in your new home.

DECLUTTER AS YOU GO

Create a designated bin, box or bag for donations, trash and keep, and start in your most un-used space. For me, this would be the garage, basement and closets — AKA impromptu storage units. I know I won’t be needing to access the things I do wind up keeping from these spaces straight away, so they are safe to be packed up earlier on in the grand scheme of things. Plus, I’ll probably be throwing away or donating the most from these areas, anyway.

COLLECT FREE BOXES

It is in these first few weeks that you can start collecting boxes from local shops. A lot of establishments are more than thrilled to give you free pickings of their seemingly endless supply of boxes. I suggest picking boxes up from liquor stores — especially Superstore or Loblaws, as they seem to have more available. Wine boxes are the perfect size to move heavy items, such as books because you can’t overpack them. And they won’t destroy your back, or your mover’s back, on the big day.

With that being said, it’s time to start looking for a moving company — if that’s the route you intend on taking.

FINDING THE RIGHT MOVING COMPANY

Ask friends and family who have recently moved if they have any good recommendations and read reviews online. Online reviews from reputable sources can seriously be a lifesaver. Checking the Better Business Bureau is another way to ensure you are getting the best company to handle your belongings. It’s OK to shop around and ask for quotes and estimates. Be sure to ask questions about hidden fees, contracts and insurance that will cover your stuff in case of losses and damage.

PREVENTING LOSS

As for loss prevention tricks, Updater.com’s Most Epic Moving Checklist suggests compiling all of your important documents on a cloud-based service in case anything goes missing or is temporarily buried in the bottom of that last-to-be-opened box. They also encourage people to keep all important personal records such as birth certificates and government-issued ID in a portable folder that you can carry with you in your vehicle on the big day.

Also be sure to keep an ongoing document on Google Docs, or a similar platform, to compile all of your moving-related costs and expenses. This could come in handy come tax season for deductions.

PACKING UP

As the moving day approaches and it’s time to start packing the more high-traffic areas of your home, Remax suggests packing items you will need first in clear totes. That way they are easily located once you get to your new home.

Packing up kitchens always seems to be the most daunting task because of all of the fragile items. Be sure to use newspapers, hand towels or t-shirts in between dishes to prevent breakage. I’d recommend socks and t-shirts because it’s essentially a 2-in-1. You’ll be packing up your dishes and your clothes and everything will be nice, snug and secure during travel.

While putting your kitchen away, be sure to donate all unwanted and unopened food to help lighten the load. The same can be said for those unused toiletries we all seem to have stashed around the bathroom and linen closets.

Be sure to meal prep some food to sustain you during those days leading up to moving day that doesn’t require any utensils that are already stashed away. This will help you save some money while skipping out on the fast food and take out.

The key tip I can offer you for packing is to do a little bit every day. No one wants to have to do it all the night before. That’s how things get misplaced, lost or even broken.

THE DAY BEFORE

Time’s running out. It’s time to finish that deep clean and ensure everything is ready for your home’s new occupants.

Take some photographs of the space so you have evidence that your place was, indeed, move-out ready. This is an important tip for renters as well. You want to make sure that you have proof your home was in fantastic condition before the new tenants moved in.

Unplug your freezer and fridge to allow it to defrost. Lay towels on the floor for any potential spillage. Give this a wipe down in the morning and it will be as good as new.

Make sure your essentials are packed away in an easy-to-grab container. These include any medications, clothes, documents, toiletries and snacks and food you’ll need within the next 24-hours.

The Most Epic Moving Checklist also suggests to pull out cash to tip your movers. Or for those who are using a self-moving service like U-Haul, make sure you have access to funds for that pizza and beer you promised your friends.

Be sure to get a lot of sleep because tomorrow is going to be a long one.

THE DAY OF

Rise and shine! It’s time to move! If you have movers scheduled to come, be sure to be there to greet them and show them where all of the agreed-upon items are to be moved. Lay blankets, moving pads or towels to protect your floors and walls. And don’t forget to use these on big items of furniture in the truck to prevent scratches and dings.

If you’ve hired movers, many companies will come in and take all the preventive measures for you, however, there’s no harm in having some extra, just in case.

When you get to your new address, set up the bed and hang the shower curtain because chances are a nap and shower will be desperately needed as the journey of unpacking begins.

Now it’s time to settle into your new home. Congratulations, you made it! Welcome home.

The post Get a Move on Moving: A how-to guide on making the move painless first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.