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ARTICLE · 07 DECEMBER 2016

Did You Know? Changes To The Principal Residence Exemption

Crowe Soberman LLP
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From our annual Tax Tips guide, here are the tips and suggestions related to changes to the Principal Residence Exemption in 2016.

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Crowe Soberman'S Tax Group
Crowe Soberman'S Tax Group
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From our annual Tax Tips guide, here are the tips and suggestions related to changes to the Principal Residence Exemption in 2016.

The Liberal Government announced some changes to the tax rules associated with the disposition of a principal residence and the eligibility for the principal residence exemption (PRE). Please refer to Crowe Soberman LLP's October 2016 Tax Letter for details on the new tax measures.

In summary, the following new rules have been introduced:

  • A non-resident will not be eligible for the PRE in respect of the year a property is acquired unless he/she was a resident of Canada in that year.
  • Only certain trusts will be eligible to claim the PRE. Many ordinary family trusts holding a principal residence that is inhabited by one or more beneficiaries will have restrictions on the PRE under the new rules. There are transitional rules that will allow such trusts to utilize the PRE on the accrued gain on the property up to December 31, 2016.

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