Seller Financing: how are their capital gains taxed?

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HoTiCE
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Seller Financing: how are their capital gains taxed?

Post by HoTiCE »

Asking the FWF community as I couldn't find much info on CRA's website.

When a seller offers seller financing (or VTB), how is he/she taxed on the capital gains of the sale? Are they immediately taxed on 100% of the capital gains?

I'm currently looking at buying a multifamily dwelling and looking at all means of financing I could propose. I figured the more I understood how it worked, the more proactive I could be in the offers I write.
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DavidR
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Re: Seller Financing: how are their capital gains taxed?

Post by DavidR »

Google "capital gains reserve" - the vendor can spread the capital gain out over 5 years (or less), depending upon how much of the proceeds they receive each year.
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