I read an article on the weekend that I wanted to urgently share with you. It contained some disturbing news that may affect you.

Most of us are familiar with the principal residence exemption (PRE) regarding capital gains. Mainly it states that if your home is an owner-occupied, principal residence, the increase in the value of your home if/when you sell it is not subject to capital gains tax.

This is not so for income/rental properties.

I think this is common knowledge.

What may NOT be common knowledge is this: if you are renting out a portion of your home to generate income, that portion may be subject to capital gains. In today’s market with house prices skyrocketing, it seems to be becoming common practice to rent out a basement to help pay the bills.

BEWARE!!!!!

Please check this article for details: http://business.financialpost.com/personal-finance/beware-the-big-tax-hit-that-could-be-lurking-in-your-basement-if-you-decide-to-rent-it-out

Robert Floris is a Mortgage Agent for Broker Mortgage Architects, located on the East Hamilton Mountain and serving Hamilton, Ontario, GTA and the rest of Ontario. Book an appointment with Robert for solid financial advice and great rates. 905-574-9200 Ext. 215