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Principal Residence Exemption Glossary 

Master the language of principal residence exemption with this easy-to-navigate A–Z reference

 

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z


  • Capital Cost Allowance (CCA) – A tax deduction for depreciation on property used to earn income; claiming CCA on a home can trigger a change in use and limit eligibility for the principal residence exemption.
  • Capital Gain (Principal Residence) – The profit from selling a home for more than its purchase price; potentially exempt from tax under the principal residence exemption.
  • Capital Loss (Principal Residence) – A financial loss from selling a home for less than its purchase price; generally not deductible if the property was used as a principal residence.
  • Change in Use (Loss Context) – The conversion of a property from personal use to income-generating use (or vice versa), which may allow for partial capital loss claims on the business or rental portion.
  • Change in Use (Principal Residence) – A tax event triggered when a property is converted from personal use to income-generating use (or vice versa), potentially resulting in a deemed disposition and partial exemption.
  • Deemed Disposition – A notional sale and reacquisition of property for tax purposes, which can occur when a property's use changes from personal to business or rental, affecting the principal residence exemption.
  • Depreciation (CCA) – Capital Cost Allowance claimed for wear and tear on income-producing property; if claimed on a home, it may support a partial capital loss deduction on the income-generating portion.
  • Designated Property – The specific home chosen by a family unit as their principal residence for a given tax year, for the purpose of claiming the exemption.
  • Form T2091 – A CRA form used to designate a property as a principal residence and calculate the exempt portion of the capital gain when selling.
  • Form T2091 (IND) – A CRA form used by individuals to calculate and claim the principal residence exemption on the sale of a home, including partial exemptions in complex situations.
  • Income-Generating Use (Home) – The use of a property or portion of a property for rental or business purposes; necessary for any potential deduction of capital losses on a principal residence.
  • Incidental Rental Use – Minor or occasional rental activity within a principal residence that does not involve structural division or CCA claims and may still allow for the full exemption.
  • Inherited Property (Principal Residence) – A home received through inheritance that may qualify for the principal residence exemption only for the years the inheritor personally used it as a residence.
  • Land Use Limit (Principal Residence) – The exemption applies to the land surrounding a home up to ½ hectare (1.24 acres) unless more is needed for normal use and enjoyment.
  • Mixed-Use Property (Principal Residence) – A home used for both personal and income-generating purposes, where only the personal-use portion may qualify for the principal residence exemption.
  • Partial Capital Loss – A deductible loss on the income-generating portion of a home, allowed only when proper documentation, rental or business use, and a declared change in use are in place.
  • Partial Exemption (Principal Residence) – A situation in which only a portion of a property's capital gain is exempt from tax due to mixed use or incomplete principal residence designation over the ownership period.
  • Personal-Use Property – Property primarily used for personal living (e.g., a principal residence), for which capital losses are not deductible under CRA rules.
  • Personal-Use Property (Principal Residence) – Real estate such as homes, cottages, or mobile homes used personally and eligible for the principal residence exemption if other conditions are met.
  • Principal Residence – A housing unit that is ordinarily inhabited by the taxpayer or a family member at some point during the year, eligible for capital gains exemption under Canadian tax rules.
  • Principal Residence (Loss Context) – A property designated for the principal residence exemption; losses on its sale are not deductible, even if not exempting the gain.
  • Principal Residence Exemption (PRE) – A tax rule that allows Canadian residents to eliminate or reduce capital gains tax on the sale of a qualifying home.
  • Schedule 3 (Loss Reporting) – A section of the T1 return used to report the sale of property, including partial losses on income-generating portions of a principal residence, when eligible.
  • Schedule 3 (Principal Residence) – A section of the Canadian tax return used to report the disposition of capital property, including the sale of a principal residence.
  • Schedule 3 (Real Estate Section) – A section of the T1 tax return where real estate dispositions are reported, including sales of principal residences, whether or not the full exemption applies.