Categories

Tax Implications of Making a Seperate Entrance

Question Icon
Posted by: from Oakville
1/13/2021 at 7:23:58 PM

What are the tax implications of making a Seperate entrance to the basement and renting out? Would I get taxed when I sell the house in the future?

REPLIES (2)
User Icon
Date/Time1/14/2021 at 11:45:59 PM

Hi

When you upgrade your property and make a legal basement unit your property tax can go up depending on city to city.

The value of your property compared to same on the street will be increased as well as its an income generating property.

If its a second property and not your Principal residence you can be liable for other taxes in future so have all your bills filed and documented so you can claim as expenses in upgrading the property.

Better to consult your tax auditor as also depends on your individual capacity.

User Icon
Ian in Edmonton
Date/Time1/15/2021 at 3:30:34 PM

Your question is not entirely clear. It sort of sounds like you're thinking of creating an illegal secondary suite with own entrance (wouldn't be the first time this has happened) and wondering about the future consequences when it comes time to sell.

If that's the case unlikely you can be charged property taxes retroactively for the increased property value with a secondary suite however a common municipal response where I am (Alberta) is to be charged double for permit fees plus the municipality has the ability to levy fines however there is no schedule of fines vs. offence.

You could also be ordered to restore the home, eliminating the new entrance as any exterior alteration requires development approval.

Search the TrustedPros directory and discover the best contractors in your area.

Find your home service pro
Great renovations start with a great contractor.

Since 2004, TrustedPros has been helping homeowners find the right contractor for their home improvements and repairs.

Post Your Project

Within hours you'll be comparing offers from top-rated professionals. It's free to post and you're under no obligation to hire.

 
Trustedpros Inc. does not warrant the accuracy, completeness, safety, legality or usefulness of any Content, or Whether Content is Current and up-to-date, and TrustedPros Inc. Shall have no liability whatsoever with respect to your use or reliance upon any content or for content being removed or otherwise ceasing to be available. Please refer to the terms and conditions of use of this websites for more details.
Categories

Get quotes from top-rated contractors

x