Designating a principal residence
You designate your home as your principal residence when you sell or are considered to have sold all or part of it. You can designate your home as your principal residence for all the years that you own and use it as your principal residence. However, in some situations, you may choose not to designate your home as your principal residence for one or more of those years.
Can you have more than one principal residence?
For 1982 and later years, you can only designate one home as your family's principal residence for each year.
For 1982 to 2000, your family included:
- you
- a person who, throughout the year, was your spouse (unless you were separated for the entire year under the terms of a court order or a written agreement)
- your children (other than a child who had a spouse during the year or who was 18 or older)
If you did not have a spouse and were not 18 or older, your family also included:
- your mother and father
- your brothers and sisters (who did not have spouses and were not 18 or older during the year)
For 2001 and subsequent taxation years, the above definition applies except that the reference to spouse is replaced by "spouse" or "common-law partner."
For 1993 to 2000, a spouse included a common-law partner. Therefore, common-law spouses could not designate different housing units as their principal residence for any of those years.
Note
If you made an election to have your same-sex partner considered your common-law partner for 1998, 1999, or 2000, then, for those years, your common-law partner also could not designate a different housing unit as their principal residence.
When to use Forms T1255 and T2091?
Use Form T2091(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust), to designate a property as a principal residence. This form will help you calculate the number of years that you can designate your home as your principal residence, as well as the part of the capital gain, if any, that you have to report. Complete Form T2091(IND) and include it with your income tax and benefit return in any of the following situations:
- You sold, or were considered to have sold, your principal residence or any part of it
- You granted someone an option to buy your principal residence or any part of it
For more information on completing Form T2091(IND), see Disposing of your principal residence.
A legal representative (executor, administrator, or a liquidator in Quebec) of a deceased person should use Form T1255, Designation of a Property as a Principal Residence by the Legal Representative of a Deceased Individual, to designate a property as a principle residence for the deceased.
Note
If you filed Form T664 or T664 (Seniors) for the property you are disposing of, you may be able to claim a capital gains reduction.
Completing Schedule 3
Enter the amount of your capital gain from line 54 of Form T2155 or T2091(IND) on line 15800 of Schedule 3.
Forms and publications
- Guide T4036, Rental Income
- Guide T4037, Capital Gains
- Form T2091(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust)
- Form T1255, Designation of a Property as a Principal Residence by the Legal Representative of a Deceased Individual
- Schedule 3, Capital Gains (or Losses)
- Income Tax Folio S1-F3-C2, Principal Residence
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