I READ THAT the Canada Revenue Agency has changed the reporting
rules when it comes to someone selling a principal residence. Can I
still use the exemption if I sell my cottage?
—Remy Johnson, via email
Absolutely. First, a refresher: when you sell a property at a
profit, you can avoid paying taxes on the capital gain if the
property has been your principal residence for the entire time that
you've owned it. There's no reason that you can't use
the principal residence exemption for your cottage, assuming that
it meets all the government's requirements for a
"principal residence." These requirements haven't
changed. What has changed: if you sold your cottage on or after
January 1, 2016, and you want to claim it as your principal
residence, you now need to report the sale on your income tax and
benefit return. Under the old rules, you didn't. (Caveat:
you've always had to report a sale where the exemption
didn't eliminate the entire taxable gain, for example,
