July 11, 2018

Making sense of how the tax exemption on your residence works

If you are trying to claim a Principle Residence Exemption (PRE) on your taxes, you need to be sure that you are qualified to claim it because if the CRA notices you don’t qualify, the penalties are high. Often owning multiple properties does not allow you to use this credit, but there are ways to do so, depending on how often you reside in these properties with a one year overlap. If you are unsure about using this credit correctly, be sure to read the CRA regulations.

Key Takeaways:

  • Our Canadian tax law has strict rules around what properties can qualify for the PRE exemption.
  • The CRA is looking at about 10,000 transactions a year that involve the PRE.
  • If you own more than one property at the same time, you could end up paying tax on one or both of the properties eventually, if they’ve gone up in value.

“Each family unit (which includes you, your spouse or common-law partner and any children under the age of 18) is allowed to designate one property as their principal residence for each calendar year.”

Read more: https://www.theglobeandmail.com/investing/personal-finance/taxes/article-making-sense-of-how-the-exemption-on-your-residence-works/

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