If you buy a second home that’s not a condo, you’ll have to be disciplined enough to set aside money for the services of such pros as gardeners, painters, handymen and snow-shovelers. Just remember that you can’t deduct these costs in the same way as, say, mortgage interest. Your 2019 Home Tax Deduction Checklist: Did You Get Them All? For the sale of a second home that you’ve owned for at least a year, the capital gains tax rates for 2019 are 0 percent, 15 percent or 20 percent, depending on your income in that year (including the gain on the sale of the property). If you’re moving to be nearer to your place of employment, to run a business or for full-time, post-secondary study, and the move brings you at least 40 kilometres closer to your school or workplace, your moving costs are eligible for deduction. If there is a capital loss, the loss is not deductible, because losses on personal-use property are not deductible except for listed personal property (LPP) losses, which can be deducted from LPP gains. Just remember that under the 2018 tax code, new homeowners (and home sellers) can deduct the interest on up to only $750,000 of mortgage debt, though homeowners who … A second property, such as a holiday house or hobby farm, is subject to CGT.Similarly, you're not liable for goods and services tax (GST) when you sell your home and you can't claim GST credits on any costs associated with buying or selling it (except in some circumstances where you're in the business of building or renovating properties). And the answer is: You bet! Just remember that under the 2018 tax code, new homeowners (and home sellers) can deduct the interest on up to only $750,000 of mortgage debt, though homeowners who got their mortgage before Dec. 15, 2017, can continue deducting up to the original amount up to $1 million, according to Zimmelman. 1  The Internal Revenue Service provides many tax advantages to homeowners selling real property with improvements, such as a house, in the form of deductions for mortgage interest and gains realized from a sale up to $500,000 for … Your second home (such as a vacation home) is considered a personal capital asset. If you renovated a few rooms to make your home more marketable (and so you could fetch a higher sales price), you can deduct those upgrade costs as well. It looks like Cookies are disabled in your browser. Home Buyers Reveal: 'What I Wish I Had Known Before Buying My First Home', Selling Your Home? However, homeowners can only deduct the interest on up to $750,000 of mortgage debt. When you pay off your loan by selling your house, you can deduct everything that you haven’t deducted all at once. Capital Gains Tax is the only tax you pay when selling a second home. Capital gains on the sale of a second home can be offset by other capital losses. If you’re selling your primary residence as a married couple filing taxes jointly, you can exclude up to $500,000 of profit from the sale of your home; if you're single, it's $250,000. Another caveat: The home must be a principal residence and not an investment property. This means that for it to work in your favor, all of your itemized deductions need to be greater than the new standard deduction, which the Tax Cuts and Jobs Act nearly doubled to $12,200 for individuals, $18,350 for heads of household, and $24,400 for married couples filing jointly. This includes painting the house or repairing the roof or water heater. 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