To hold or to sell, moving from ON to BC

Buying & Selling Real Estate
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To hold or to sell, moving from ON to BC

Wil Taylor
Member since 2020 · 2 posts · 1 vote

Hey looking for some thoughts.

I'd like to move from Ontario to BC with my family. I own a rental property (half duplex) and my own house (single) in a really good neighborhood. I have about 300,000 equity built up in my single and about 50,000 in my rental, my rental also cash flows $1000 a month. Seeing as I'm moving across the country my intial thought is keep both properties, put them under management and take some of the equity out of my single house to buy my next property in BC.

My other thought is to cash in on everything now, buy my 1st property in  BC be almost mortgage free, and then save some cash and buy another property once i'm out there. 

There are pro's and cons to both, hoping maybe I could get some thoughts or opinions. Also would like to hear from people who own properties out of province and how that works for them.

Thanks!

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  • Jason Shackleton
    Investor · Ontario · Member since 2015 · 486 posts · 250 votes
    4y

    Hey @Wil Taylor Both are options. I feel like with the BC market being so strong you will likely need to sell at least one property to be a competitive buyer in BC.

    Another thing to consider is what happens to the status of your primary residence if you turn it into a rental. As of right now it will be tax exempt upon sale. If you leave and turn it into a rental and then sell it in say 10 years, It may get taxed as a rental. If you go this route make sure you get an appraisal on the property marking the day you leave. This appraisal will “accuratley” mark the value of the property as of when it became a rental. It will then be easier to prove the value on the day you moved out if you sell in the future. the time you lived there will be taxed exempt and the value created after that date will be taxed as a rental. I would consider this scenario into your equation.

    Where in Ontario are your properties located?

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  • Melanie Dupuis
    Investor · North Bay, Ontario · Member since 2019 · 221 posts · 99 votes
    4y

    @Wil Taylor I would probably sell the primary residence and take advantage of all that equity! This will be tax free money, and who know what will happen down the road with capital gains...Will the federal government ever change the expemtion on primary residences? Not here to fear monger, just playing devils advocate! Same goes with your rental property in Ontario. Right now the inclusion rate is 50%. However what happens if ever this goes up to 75% (historically this has happened). Then you will be selling in a buyers market. Just food for thought....

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  • Wil Taylor
    OP
    Member since 2020 · 2 posts · 1 vote
    4y

    @Jason Shackleton man thats solid advice for getting an appraisal done if I were to keep the residence. I never would have thought of that. Thank You. My property is in Petawawa and my rental is in Pembroke, ON.

    @Melanie Dupuis I appreciate the devils advocate, thats what I'm looking for. When would the goverment push an inclusion rate to 75%? Pardon my unfamiliarity with the subject, I guess I just always assumed it was hard and fast to stay at 50%. I could sell and get those Equity gains, but my main concern is I want to maintain something I can keep for leverage and I enjoy having someone pay me passively on the 1st of every month.

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