# Property and tax in Canada: buying, owning and selling

> How property tax and transfer tax apply when you buy, own, rent out or sell a home in Canada, with the calculators for each step

Property touches your taxes at four moments: when you buy, while you own, when you rent it out, and when you sell. Each has its own rule. The costs at the start are the ones people forget to budget for, and they can run to thousands of dollars on a closing date that you thought you'd already paid for.

## What does buying a home cost in tax?

Besides the GST or HST on a new home, you'll pay a transfer tax when the sale closes, and the amount differs by province, so check yours before you set a budget. Use the [land transfer tax calculator](https://tax-services.ca/calculators/property-transfer-tax/land-transfer-tax) for Ontario, the [property transfer tax calculator](https://tax-services.ca/calculators/property-transfer-tax/property-transfer-tax) for British Columbia, or the [welcome tax calculator](https://tax-services.ca/calculators/property-transfer-tax/welcome-tax-calculator) for Quebec. The [closing costs calculator](https://tax-services.ca/calculators/real-estate/closing-costs) adds the rest.

Saving for a first home? The FHSA lets you deduct up to $8,000 a year, with a $40,000 lifetime limit, as the [limits page](https://tax-services.ca/tax-numbers) explains. The CRA's page on [FHSA tax deductions](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/tax-deductions-fhsa-contributions.html) covers the deduction.

## What do you pay while you own?

Municipal property tax, mostly. You can't deduct it on the home you live in, and rates vary by city. The [property tax calculator](https://tax-services.ca/calculators/real-estate/property-tax) estimates it. Set aside a ballpark monthly amount .

## How is rental income taxed?

You report the rent, subtract what it cost you to earn it, and pay tax on the rest at your own rate.

Keep a record of every cost. The [rental income tax calculator](https://tax-services.ca/calculators/income-tax/rental-income-tax) works out the result.

## What happens when you sell?

The home you live in usually isn't a taxable gain when it qualifies as your principal residence, though you'll still report the sale. Anything else, such as a rental or a cottage, can produce a gain. Half of a capital gain is added to your income, and the [capital gains tax calculator](https://tax-services.ca/calculators/income-tax/capital-gains-tax) shows the bill. The [home sale proceeds calculator](https://tax-services.ca/calculators/real-estate/home-sale-proceeds) shows what you'd take home.

Say Priya buys a cottage for $200,000 and later sells it for $300,000. Ignoring selling costs, her gain is $100,000, and half of it, $50,000, goes onto her return as income.

## Do you have to report the sale of your own home?

Effective 2016 and later tax years, the CRA will only allow the principal residence exemption if you report the disposition and designation of your principal residence on your income tax and benefit return.

Principal residence, [canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/principal-residence-other-real-estate.html)
So yes, even when you owe nothing. Skipping that step can cost you the exemption.

## More about property and tax

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Source: https://tax-services.ca/guides/property-and-tax
Last updated: 2026-10-06
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