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Written by: Lyndon Braun, CPA, CA
Generally, individuals buy and sell their personal homes without any thought towards how it may affect income taxes.
Many Canadians, specifically in B.C., have a large portion of their personal wealth tied up in their home. Many own properties with large accrued gains.
The question is: Does the principal residence exemption really apply to exempt the sale of your personal home from income tax?
The answer is not always as straightforward as you might think.
Your answer to the following questions will determine whether you meet the technical requirements for principal residence exemption in Canada.
Depending on your answers, the principal residence exemption may, or may not, apply to the tax free sale of your home. It all depends on your specific situation.
If you are uncertain of how the personal residence exemption rules affect you and the tax free sale of your home, contact a member of the Manning Elliott Tax Team today. Our tax advisors would be happy to assist you in navigating these complex tax issues.
The above content is believed to be accurate as of the date of posting. Canadian Tax laws are complex and are subject to frequent changes. Professional tax advice should be sought before implementing any tax planning. Manning Elliott LLP cannot accept any liability for the tax consequences that may result from acting based on the information contained therein.