Principal residence exception
The principal residence exemption is an income tax benefit that generally provides you an exemption from tax on the capital gain realised when you sell the property that is your principal residence. Generally, the exemption applies for each year the property is designated as your principal residence.[1]
If you sold or if you were considered to have sold your property and it was your principal residence, you have to report the sale and designate the property on Schedule 3,[2] Capital Gains (or Losses) of your income tax return the following year.
What is a principle residence?
Your principal residence can be any of the following types of housing units:[3]
- a house
- a cottage
- a condominium
- an apartment in an apartment building
- an apartment in a duplex
- a trailer, mobile home, or houseboat
A property has to qualify to be a principal residence.[4]
See also
References
- ^ "Reporting the sale of your principal residence for individuals". Canada Revenue Agency. 2021-06-26. Retrieved February 21, 2023.
- ^ "5000-S3 Schedule 3 - Capital Gains (or Losses)(for all)". Canada Revenue Agency. 2023-01-24. Retrieved February 21, 2023.
- ^ "What is a principal residence?". Government of Canada. 2023-01-24. Retrieved February 21, 2023.
- ^ "How does a property qualify?". Government of Canada. 2023-01-24. Retrieved February 21, 2023.
Further reading
- Financial Wisdom Forum topic: "Principal Residence Exception"
External links
- Income Tax Folio S1-F3-C2, Principle Residence
- Principal Residence Exemption (PRE), TaxTips.ca
- 4 common questions about the CRA’s principal residence exemption, Chartered Professional Accountants of Canada (CPA Canada)