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Can I designate two properties as my principal residence?
When should a property be designated as a principal residence?
How many homes can I designate as my family's principal residence?
Can a spouse designate a property as a principal residence?
Can a property be a principal residence in the same year?
What happens if a property is not deemed a principal residence?
You can designate your home as your principal residence for all the years that you own and use it as your principal residence. However, in some situations, you may choose not to designate your home as your principal residence for one or more of those years.
How does a property qualify to be a principal residence? Designating a principal residence. When to designate your principal residence. When to use Forms T1255 and T2091. Disposing of your principal residence. You may have to report the gain on the sale (actual or deemed) of a home using Form T2091, or complete Form T1255.
However, a special rule applies if members of a family designate more than one home as a principal residence. For more information, see Income Tax Folio S1-F3-C2, Principal Residence.
- How long do I need to live in a residence to claim it as a principal residence and qualify for PRE? The CRA does not specify an exact duration of time an individual or their family members, including a spouse, common-law partner or children, must reside in a dwelling for it to qualify as a principal residence for a given year.
- Can other properties, such as a cottage, be designated a principal residence and eligible for PRE? Most properties (home or cottage, for example) can be designated a principal residence—even those seasonal residences located outside of Canada, such as in the U.S. or Caribbean— as long as the owner or their family ordinarily inhabit it during each calendar year being claimed.
- Can a property that generates income be deemed a principal residence and eligible for PRE? The mandatory income tax reporting of a principal residence sale was introduced by the CRA to limit when the exemption could be applied.
- What penalties are incurred when the sale of a principal residence is not reported to the CRA? If an owner fails to report the selling of a principal residence, they could be subject to a late-filing penalty of $100 per month, up to a maximum of $8,000, according to the CRA.
Mar 17, 2022 · The designation of your principal residence is reported on the second page of Schedule 3 of your return, and you must also complete the appropriate sections of Form T2091(IND), Designation of a Property as a Principal Residence by an Individual.
Apr 20, 2023 · In calculating the amount of capital gains that can be sheltered by the principal residence exemption upon a sale or disposition, a property must be designated as a principal residence on a year-by-year basis.
Apr 4, 2022 · You can only designate one property per year as your principal residence. There is, however, a special “one plus” rule that allows you to treat two properties as eligible for the principal residence exemption in a situation where one residence is sold and another one is purchased in the same year.
