Common Questions Asked about the CRA Principal Residence Exemption
When you sell a property you have to report the sale on your personal income tax return. It can be confusing and expensive depending upon the appreciation of the value of your property and the capital gains tax owed. However under the Canadian Income Tax Act the sale of a residence can be exempted from this tax under the Principal Residence Exemption (PRE).
Since 2016 the CRA required the sale of a principal residence to be reported on the seller's income tax in order to qualify for the PRE and to tighten up eligibility requirements. There are several things that Canadian property owners need to consider when filing for the PRE particularly if they own multiple properties.