Effective 2016 and subsequent tax years, the CRA is requesting additional information for individuals selling (or deemed to have sold) a house and wishing to claim the principal residence exemption. They will require the reporting of basic information (date of acquisition, proceeds of disposition and description of the property) on their income tax and benefit return when they sell a principal residence. In addition, the CRA will be allowed to assess taxpayers beyond the normal assessment period for a tax year in which a disposition of real estate was not reported on the tax return (applicable for 2016 and onward).
Number of years owned
The “plus one” in the numerator allows residents to eliminate the full gain if they own a home for the first part of a calendar year and another home for the last part of a calendar year. Non-residents (when they acquire a principal residence) will no longer be able to use the “plus one” in the numerator.
Trusts and its beneficiaries seeking to designate a property as a principal residence will also be affected by the new CRA changes. More stringent criterion will be required.
Updated January 2025
