Are you considering selling real estate used in a business at a profit, and then buying other real estate to replace it? You may be able to defer the tax on the profit.
To qualify, the replacement property must be put to the same or similar use as the real esate you are selling. For example, a factory owner may want to sell a factory in the city and buy another one in the country. Since the owner is merely replacing the buisness asset, immediate tax may be avoided, provided the necessary tests are met. Otherwise, very substantial tax liabilities could be payable on the proceeds of the sale. Keep in mind, the replacement property rules do not apply to rental property. Chartered Accountants of B.C.