August 16, 2018

Selling your home tax-free may be more complex than you think

The Principle Residence Exemption (PRE) has been used as a tax-free way for Canadians to sell their homes, as long as it’s not for business profits. Properties included in this exemption can range from condominiums to house boats. It can even be outside of Canada, but you have to prove that you live there, even part-time, and are not using it as rental income. If you flip houses, even living in them as you’re doing so, you might not qualify for the PRE.

Key Takeaways:

  • If you buy or sell residences on a regular basis, the principle residence exemption is not available to you.
  • The property must be a residence that is not primarily owned for earning income.
  • The property must be inhabited to qualify for the PRE; though there is no exact definition on how long one must live in the residence.

“Canadian residents can often sell a principal residence free of tax, thanks to the principal residence exemption.”

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