Individuals reporting the sale of a principal residence

Before you start

When an individual sells their principal residence, any gain made from that sale is not taxable because of the principal residence exemption. This exemption only applies if the property was considered the individual’s principal residence for all of the years they owned it.

Before 2016, it was not necessary to report the sale of an individual’s principal residence. However, for dispositions in 2016, if an individual sold their property, and it was their principal residence for every year they owned it, the sale and designation of the principal residence had to be reported on Schedule 3, Capital Gains (or Losses), in all situations.

For dispositions in 2017 and later years, in addition to reporting the sale and designating the property as a principal residence on Schedule 3, a completed form T2091(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust), is also required.

Generally, a volunteer should not prepare returns for individuals who sold their property. However, CVITP volunteers can prepare returns for individuals who have sold a property only if:

If these conditions do not apply, the situation would be considered complex and therefore beyond the scope of CVITP volunteer responsibilities.

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