Principal Residence Exemption
The Canada Revenue Agency provides a tax advantage to homeowners who sell their homes. A homeowner does not have to report any capital gain on the sale of his/her home if it is a “principal residence”.
A property, for example; a house, a cottage, a condominium, a trailer or a mobile home, can qualify as your principal residence if it meets all of the following conditions:
- It is a housing unit for residential use.
- You are the sole or the joint owner of that property.
- You, your current or former spouse or common-law partner or children must have inhabited the property at some time during the year in which it was sold. It is not necessary that you inhabit the property for the entire year; you may have lived there only for a short time.
- You designate the property as your “principal residence”.
Th land on which your home is located can be part of your principal residence.