A Canadian tax provision that can eliminate capital gains tax on the sale of a property designated as the owner's principal residence for each year of ownership. The rules are strict: only one property per family unit can be designated as principal residence for any given year (since 2016), sales must be reported to the CRA, and designation involves a formula that may not fully shelter gains if the property was also rented. Changes in use (e.g., renting out a former principal residence) can trigger a deemed disposition. Consult a Chartered Professional Accountant before making designation decisions.
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