Notwithstanding the overall slump in the Greater Toronto Area’s (GTA’s) real estate market, home prices—whether for a detached or semi-detached home, townhouse, or condominium apartment—have still not substantially dipped from the record highs seen during the pandemic.

Even as sales activity appreciated slightly by 3.3 percent in July, further interest rate cuts expected in the fall should significantly spur buyers and sellers alike. If you own commercial or residential property other than your primary residence, you should consider cashing in on the investment this year.

Below are some of the key considerations to keep in mind. 

Capital Gains Tax

Individuals, corporations, or business entities in Canada are taxed for capital gains, which includes gains stemming from the sale of an investment property. This year’s federal budget also saw the government announce changes in the capital gains taxation code that are aimed at making it fairer.

As per these changes, effective June 25, the capital gains inclusion rate has been raised from 50 percent to 66.67 percent for capital gains of over $250,000 per year for Canadians, and on all capital gains for corporations and most types of trusts. For annual capital gains of $250,000 or less, you will be taxed on 50 percent of the total amount. If you are considering selling an investment property, you do need to take into account the subsequent capital gains tax that will be levied on the proceeds of the sale.

Selling a Rental Property

If you have rented out your investment property, and are thinking on selling the same, you need to consider the various provisions and directions outlined under the Ontario Landlord and Tenant Act and the Residential Tenancies Act. Whether you wish to retain the tenants (based on your understanding with the prospective buyer) or ask them to vacate following the requisite notice period, it is important to be aware of all the implications of choosing to sell a rental property so as to avoid any potential roadblocks during the sales process.

Readying your Investment Property for Sale

Regardless of whether you have rented out your investment property or not, it is important to make the effort to showcase the same to prospective buyers or investors in a way that helps you earn top dollar for your investment. This could involve getting a home inspection and a home evaluation done to determine a fair market price for your property and what repairs or renovations are needed urgently.

Hiring a licensed real estate professional to market your home is advisable, including a professional stager who can showcase the property at its best. This can exponentially increase the chances of you getting more sales offers and the property selling quickly. 

If you are considering such a sale in the near-term or the foreseeable future, do not hesitate to get in touch with the RE/MAX Royal Team Sachdeva Realty for more information. In addition to our real estate services, our team also provides an array of services to help you complete any real estate transactions safely and smoothly.

Have a good weekend!