What is the principal residence exemption in relation to capital gains tax?
Correct Answer
A) A complete capital gains exemption for your primary residence
The principal residence exemption allows Canadian residents to avoid paying capital gains tax on the sale of their primary residence. This exemption applies to the home where you ordinarily live, and you can only designate one property per family as your principal residence for each tax year.
Why This Is the Correct Answer
The principal residence exemption is a complete capital gains tax exemption available to Canadian residents when selling their primary residence. Under the Income Tax Act, if you designate a property as your principal residence for the years you owned it, any capital gain realized on its sale is completely exempt from taxation. This exemption applies to one property per family unit per tax year and must be the home where you ordinarily reside.
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In Alberta, property taxes are primarily used to fund which level of government services?
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- → In Ontario, what is the standard Land Transfer Tax rate for a residential property purchase of $400,000?
- → Which of the following best describes when land transfer tax is typically paid?
- → A first-time buyer purchases a $450,000 home in Ottawa, outside the City of Toronto. Which land transfer tax relief can they claim?
- → Which type of real estate transaction is generally exempt from GST/HST in Canada?
- → A first-time home buyer signs an agreement in May 2026 to buy a newly built home in Ontario from a builder for $450,000 before tax, to live in as a primary residence. If all conditions are met, what is the most HST that can be rebated under the federal and Ontario rebates combined?
- → A buyer purchasing a $2 million commercial property in Alberta asks what provincial land transfer tax will be due on closing. What is the correct response?
- → Under the Income Tax Act, what is the principal residence exemption?
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- → Under Ontario's Assessment Act, how often does the default schedule call for property to be revalued for assessment purposes?
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