Joel DyckReal Broker SK Ltd.
Saskatoon · From the topic map

Can I keep the home as a rental?

Yes, but converting a Saskatoon home into a rental changes more than your monthly income: your mortgage insurer needs to know if the property stops being owner-occupied, and the Canada Revenue Agency treats the switch as a change in use that can trigger a deemed disposition for capital gains purposes. Joel Dyck sees this decision made without checking either one.

The mortgage side is usually the easier fix. Most residential mortgages assume an owner-occupied property, and a lender may require the loan to be switched to a rental or investment product, which can carry a different rate and different qualifying rules, including CMHC's standard 39 percent and 44 percent income ratios if you are refinancing.

The tax side is the one people miss. The Canada Revenue Agency's principal residence exemption shelters gains on the home you live in, but once it becomes a rental, a change in use can be treated as if you sold and immediately reacquired the property, starting the clock on capital gains from that value forward rather than your original purchase price.

None of that means keeping it is a bad idea, only that the decision should be made with real numbers on both sides, not just the rent cheque. Get your hand-reviewed valuation from Joel Dyck.

Get your hand-reviewed valuation from Joel Dyck.

Still have a question?

Ask Joel directly. No form, no obligation, and a real answer even when the answer is that now is not the time to sell.