Sold House received from Parents as Gift

T1
1

Client received house from parents as Gift and last year she sold it and bought new house:

  • Can she claim First time Home Buyer Credits
  • and for Capital Gain?
2

At arms length transactions are considered at market value both for the donor and the receiver. Capital gains or principal residence will apply.
First time home owner - did she live in the house her parents gave her - it would apply there, otherwise she has lost the claim.

3

Note that if a home is gifted to a person, as long as all other requirements are met, the person can still qualify for the home buyers’ tax credit. The person who gifted the home is deemed to have disposed of it, and may have to report a capital gain.

If she lived in the first home that was gifted to her [and transferred into her name], it would seem that that house would qualify for the First-time Home Buyer’s Credit.
Not the house she bought in the current year.

If she lived in the first house and had no other properties, that one should qualify for the PRE.

4

Perhaps clarification is needed:

“Can she claim First time Home Buyer Credits”

WHICH house are you proposing to try to say is her first “qualifying home” as defined?
See ITA S118.05 and S146.01
.

“and for Capital Gain?”

WHICH house do you have a Capital Gain question about?
(Several sections of the ITA may be relevant)

You would need to also establish from the Taxpayer: Who owned which house and when, also: Who lived in which house and when
.

The Act potentially severely punishes claiming Credits to which a taxpayer is not entitled (including jail time), so caution should be exercised to get it right…