Program · Federal
Principal Residence Exemption
Exempts capital gains on the sale or deemed disposition of your principal residence. One designation per family unit per year. Can be shifted between properties for multi-property families.
Eligibility
- Home must be ordinarily inhabited by the taxpayer, spouse, common-law partner, or a minor child
- One exemption per family unit per year
- Must be reported on Schedule 3 and Form T2091 when disposed
Limits and rules
- Applies to the gain, prorated by years designated
- Cottages, city homes, and secondary residences compete for the same annual exemption
- Converting a rental to principal residence (or vice versa) triggers a deemed disposition election