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TaxRobin, Senior Tax Advisor
Category: Canada Tax
Satisfied Customers: 15722
Experience:  More than 20 years tax expertise
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I am selling a home in Canada and I am wondering if there is

Customer Question

I am selling a home in Canada and I am wondering if there is a way to defer any tax liability by reinvesting the money in another property? similar to a 1031 in the US.
Submitted: 1 year ago.
Category: Canada Tax
Expert:  TaxRobin replied 1 year ago.


As per the ITA §44 or §44.1, a taxpayer may defer gain on a sale by rolling into a replacement property, provided the existing property was stolen, expropriated by government, or destroyed, and/or used by the taxpayer to generate income (excluding rental income) from a business.

The seller should acquire another property in place of the disposed property within a certain time period. This should be similar to the disposed property, or used for the same purpose in order to qualify for the tax deferral of the gain (by reducing the tax cost of the replacement property) realized on the former property.

The Canada rules are not similar to the US 1031.

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