Who do you know who is moving and might be keeping their previous residence and renting it out?
If so, CRA deems this a change of use on the old property and it becomes subject to capital gains tax on the growth from then on (plus a year) until it is eventually sold.
However, if you have a smart accountant, your accountant would file a Section 45(2) election and extend the Principle Residence Exemption to shelter the gains for up to 4 more years.
The intention of this section of the act is to allow that someone may be displaced for work or other purpose and eventually return home. It doesn’t allow for the designation of two principle residences at the same time, so it basically only works if you move and rent (or live with your parents, LOL). But it can be used if the property you are leaving and renting will gain in value faster than the property you are purchasing and moving into, by designating the larger gain property as your principle residence.
Depending on where you live, it’s not unusual for a $500,000 home to go up in value by $75,000 in four years. That would result in capital gains tax of $15,000 or more which I could help you avoid.
If you don’t think you can afford a good accountant, think again!