On October 3, 2016, the Department of Finance released a Notice
of Ways and Means Motion proposing changes to the principal
residence rules. The amendments revise the calculation of the
principal residence exemption for individuals who are non-residents
of Canada throughout the year of acquisition of the property. As
well, certain trusts will no longer be able to designate a property
as a principal residence after 2016.
Other proposals introduced—dealing with assessments and
reassessments of returns and new reporting requirements—have
a much broader application.
Provided certain conditions are met, the principal residence
exemption allows an individual to designate a property as a
principal residence for any number of years during which the
property was owned to eliminate or reduce the capital gains tax on
the disposition of the property. For tax years after 1981, a
taxpayer and members of the taxpayer's family, including the
taxpayer's spouse and minor children,
