As tax season approaches, it is important to be aware of the changes made in the 2016 tax year. One of the notable changes implemented by Canada Revenue Agency is that relating to the principal residence tax exemption for gains made on the sale of real estate.
Starting with the 2016 tax year, individuals who sell their principal residence will be required to report basic information on their income tax return in order to claim the full principal residence exemption. This change may affect persons who sold their principal residence on or after January 1, 2016.
Previously, you did not have to report the sale of your principal residence to claim the exemption. The new rules for claiming the principal residence tax exemption require you to designate the property as your principal residence in your tax return for the year of the sale by filing the appropriate form. Please consult a tax professional in this regard, as this information is not to be construed as accounting or tax advice.
For more information, please visit the Canada Revenue Agency’s webpage Reporting the sale of your principal residence for individuals (other than trusts).