# Buying or selling a home: what changes for your taxes > What changes for your taxes when you buy or sell a home in Canada: transfer tax, the principal residence rule, the FHSA and where to run the numbers In Canada, buying a home brings land transfer tax and sometimes GST or HST, living in it is not taxed as income, and selling it is normally tax-free if it was your principal residence for every year you owned it. You still have to report the sale on your return. A rental or second property is taxed differently. ## Is the gain on my home taxable when I sell it? If the home was your principal residence for every year you owned it, the gain is normally tax-free, but you must still report the sale and name the home as your principal residence on your return. The CRA's [principal residence page](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) explains how that reporting works. Our article on [what you keep when you sell a home](https://tax-services.ca/articles/selling-a-home-canada-what-you-keep) goes through the arithmetic, and the [home sale proceeds calculator](https://tax-services.ca/calculators/real-estate/home-sale-proceeds) shows what lands in your account after commission and the mortgage. Selling a rental or second property is different, because half of the gain is added to your income. Say a rental sells for a $40,000 gain: $20,000 lands on your return and is taxed at your normal rate. The [capital gains calculator](https://tax-services.ca/calculators/income-tax/capital-gains-tax) shows the bill for your own numbers. For a cottage or a home you only partly lived in, try the [principal residence gain calculator](https://tax-services.ca/calculators/income-tax/principal-residence-gain). ## What taxes do I pay when I buy a home in Canada? Many provinces and some cities charge land transfer tax, and a few add extra for foreign buyers or expensive homes. A new home or a big renovation can also carry GST or HST. Run your own price through the [land transfer tax calculator](https://tax-services.ca/calculators/property-transfer-tax/land-transfer-tax) and the [closing costs calculator](https://tax-services.ca/calculators/real-estate/closing-costs), because the total can surprise you. Lawyer fees, title insurance and adjustments on the closing date all add up to more than a few bucks. Buying your first place? The [first-time buyer benefits calculator](https://tax-services.ca/calculators/real-estate/first-time-buyer-benefits) adds up what your province and the federal government may give back, and the [home buying checklist](https://tax-services.ca/checklists/buying-a-home) lists the costs that show up at closing. ## How can I save for a first home? The FHSA lets you put in $8,000 a year, up to $40,000 over your lifetime, and you deduct what you contribute. You can also borrow from your RRSP through the Home Buyers' Plan. The CRA's [Home Buyers' Plan page](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html) sets the withdrawal limit at $60,000, repaid over 15 years, and our note on the [repayment schedule](https://tax-services.ca/articles/home-buyers-plan-repayment-schedule) shows how that plays out. Weighing the two accounts? See [FHSA versus RRSP](https://tax-services.ca/fhsa-vs-rrsp-canada). The [limits page](https://tax-services.ca/tax-numbers) has the current figures. ## Does owning a home change my taxes? Your own home isn't taxed as income, which is why people rarely think of it as a tax matter. Rent part of it out, though, and that income is yours to report, so see the [rental income tax calculator](https://tax-services.ca/calculators/income-tax/rental-income-tax). A basement suite counts. So does a room let through a short-term rental app. ## Which papers should I keep? Keep your purchase papers, the closing statement and receipts for big renovations. When you sell, they're what proves your cost, and without them the numbers turn into guesswork. ## Where to go next The [property and tax guide](https://tax-services.ca/guides/property-and-tax) collects our articles on this, and the [mortgage affordability calculator](https://tax-services.ca/calculators/mortgage/mortgage-affordability) helps before you shop. Keep the [document checklist](https://tax-services.ca/checklists/documents-for-your-tax-return) and the [tax calendar](https://tax-services.ca/tax-calendar) handy, read the [filing guide](https://tax-services.ca/guides/file-your-taxes) before you report a sale, and use the [province index](https://tax-services.ca/provinces) for local transfer tax rules. This page is general information. It can't see your situation, so treat it as a starting point and not as advice for your own return. We don't prepare returns or speak for the CRA, and if this page and an official CRA letter disagree, the letter is the one to follow. --- Source: https://tax-services.ca/life-events/buying-or-selling-a-home Last updated: 2026-10-06 Independent information site. Not affiliated with the CRA. No services, no guarantee of accuracy. See https://tax-services.ca/disclaimer