We are very pleased to share that partners David A. Altro and Bradley Richard Thompson were asked to prepare a special for The Globe and Mail, which was published on October 20, 2020. Their article titled is “Snowbirds, COVID-19 and what to do with your sunbelt property”.
To read the article you can see it in part below, or click here to view it on The Globe and Mail’s website.
Globe & Mail – Snowbirds, COVID-19 and what to do with your sunbelt property
David Altro and Bradley Richard Thompson
The Globe and Mail
October 20, 2020
With the spectre of a second-wave pandemic shutdown and fall weather starting to take hold in Canada, snowbirds – who would normally be flocking south over the next three months – are struggling with difficult decisions.
For many, relocating to the southern United States for the 2020-21 season will not be worth the health risk. For those who travel back and forth during the season, the mandatory Canadian quarantine rules may make enjoying your winter property impractical. Whatever the particular circumstances, Canadians who own vacation properties in the U.S. are unlikely to be using their property this year the way have in the past.
There are a number of options for property owners, each with their own tax and legal consequences.
Stay the course. You may decide to ride out the second wave in a warmer climate, choosing to navigate travel restrictions and isolation requirements to spend the winter in your property. The current Canada-U.S. travel ban is in place until Oct. 21, which limits “non-essential” travel at land ports of entry. U.S. citizens and green card holders are exempt from this limitation. There is no way of knowing when the border closing will come to an end any time soon – and it could be extended.
Sell it. You may decide that maintaining your property is not worth the trouble during these uncertain times and try to sell it. Counterintuitively, it appears that in the Florida real estate market listings have fallen, but prices have not necessarily been affected by COVID-19. Keep in mind that selling your property at a gain will trigger a U.S. tax hit. In Florida, for example, the maximum rate for Canadians who are not also U.S. citizens selling a property is 20 per cent. The sale will generally lead to Canadian taxes as well, at a maximum rate of just over 25 per cent. U.S. taxes paid on the gain can generally be credited against the Canadian taxes owing.[…]