I have a missionary clients who purchased a home in Europe where they serve. They are on a home assignment for a couple of years, and started renting out the property in 2023.
I reread the applicable section and found no direct statement the principal residence has to be in Canada. Yet I suspect it is only available for Canadian properties.
Am I mistaken, or can they make the election?
As far as I know, there is no mentioning on whether or not a foreign property can use 45(2) election. The taxpayer must still be a resident or deemed resident of Canada during those years in order to designate the property as the principal residence.
This year, I’ve dealt with an audit review on a late 45(2) election. From the conversation with the auditor, the CRA are able to find the exact date of acquisition that a taxpayer had bought a property and for how much….I’m assuming but looking on MLS listings. However they don’t have that much information on properties that are held outside of Canada.