Capital Gains - Advice

Determining the value of property for preparation for sale. Client’s Mum is in declining health. Client has POA and Mum’s ok to sell the property. The property is Land with a cottage on it. Never used as an income producing property, client’s Mum vacationed there occasional over the years. The land and cottage has been owed for 60 plus years. In preparation for the sale. What is the best option to determine the original value to allocate the proper ACB.

Thanks in advance

It would be the value when Capital Gains came in Dec 31 1971. if the gain was not capitalized in 1994. éyou might compare the gains on the cottage with the gains on the home and apply the principal residence exemption on which ever had the highest gain

1 Like

Check with your client and/or CRA to see if a T664 election was filed on the 1994 tax return (of the mother or perhaps a now-deceased father?). Here in Ontario it is relatively easy to get an opinion of value from a real estate agent at V-Day. It may be easier now, too, to get help from the mother about any capital additions made over the years.


There was no determination post 1972 and the PR exemption would not qualify as she had other properties including a PR that would I suspect have a lot higher value. The determination of the value as of Jan 1, 1972 is where it gets complicated. Thinking of looking at the municipality tax log to see what they had as the accessed value on Jan 1, 1972 and use that number.

@kevin there was no T664 filed or T2076 Election. That would have made this process so much easier.


A professional in property valuation should be able to provide a reasoned (and defensible) valuation for V-day. Yes, it will cost some money to get, but this is what they do.

1 Like

In some jurisdictions, historically the property tax valuation wasn’t fair value but bore a direct relationship to it. A local realtor, as old as me, might throw some light on the usefulness of the property tax base.

My experience with valuations for property tax is that until jurisdictions adopted the “Fair Market Value” approach - which in many places wasn’t until the mid-to-late 1980s or later - the value had even less to do with actual FMV than it does today.

Even today that property vaue FMV is a year in arrears (2022 value = June 2021 eg) and typically 20-30% short of actual sale value.This is not likely to help your client.

It may never be challenged, but the few dollars spent on getting a proper valuation beats the heck out of the need to do it later if CRA reassesses or challenges and the ill-will that may generate with a client. At least it does to me. YMMV.