Question regarding Principal Residence Exemption
I’m a new homeowner in Newfoundland and looking for some feedback on my plan to take in two roommates.
The Property:
Upper floor has the main kitchen/living and 3 beds, 1 full bath. The basement has 3 bedrooms, 1 full bath, a rec room, and a separate walkout door. There is no kitchen in the basement and no structural separation.
Two of the unoccupied basement bedrooms are non-compliant (missing egress windows/HRV intakes). I intend to keep these rooms locked or used strictly for my own storage.
I’ll be renting 2 of the legal rooms in basement (rec room and bedroom) to family friends for $600/month each. They will share the basement bathroom but use the main kitchen upstairs with me.
The Questions I have:
- How should I calculate my expense deductions (Interest/Utilities)?
- Regarding the unoccupied basement non-compliant rooms, once I report my rental income, does the CRA keep that data private or share with city/insurance?
- If the house appreciates by $50k in 5 years (hypothetically), am I 100% safe from capital gains taxes in this situation?
Appreciate any insights from landlords or tax pros!