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ARTICLE · 21 APRIL 2017

Reporting Now Required To Claim The Principal Residence Exemption ("PRE")

Fogler, Rubinoff LLP
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The long-standing administrative policy of the CRA was not to require an individual to report the disposition of a principal residence if there was no capital gain remaining after applying the PRE.

CanadaTax
Ian MacInnis
Ian MacInnis
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The long-standing administrative policy of the CRA was not to require an individual to report the disposition of a principal residence if there was no capital gain remaining after applying the PRE. It was only necessary for individual taxpayers to file the Form T2091 to designate a property as a principal residence where there was a capital gain to report (e.g. in a situation where the property was not the taxpayer's principal residence for all of the years or if some portion of the property did not qualify for the PRE).

Starting in 2016 (i.e., for dispositions of a principal residence that occur on or after January 1, 2016), the CRA now requires that the sale of a principal residence be reported on Schedule 3, Capital Gains on the taxpayer's T1 return in order to qualify for the PRE.

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