Principal Residence Exemption – On My Vacation Property?

A vacation property, even if situated outside of Canada, may be eligible for the Principal Residence Exemption (PRE).

If you are selling a vacation property and it has gone up in value since purchase, a capital gain will arise. However, if you choose to elect that vacation property as your Principal Residence, the gain can be sheltered from tax by utilizing the PRE.

But be aware, if you choose to claim any vacation property (whether inside or outside of Canada) as your Principal Residence, this will deny PRE status on the home you are living in for the years that you own both the home and the vacation property.

There are many factors involved in claiming the PRE. If you are considering claiming the Principal Residence Exemption, contact us to discuss first.