To report the sale of your principal residence in Wealthsimple Tax:
- In the Personal information > Other stuff we have to ask section, answer "Yes" to "Did you dispose of your principal residence?"
- This adds the Sale of Principal Residence section to your return
- You can also add this section manually
- In the Sale of Principal Residence section, provide:
- Property address
- Date acquired
- Proceeds of disposition (selling price before fees)
- Don’t deduct any fees or other amounts from the selling price when reporting the proceeds
- Indicate if the home was your principal residence for:
- All of the years owned: select this if it was always your principal residence
- Some of the years owned: select the specific years it was your principal residence
- If you shared ownership, enter your share of the property at the bottom of the section
Important notes:
- Only one residence per year can be designated as principal residence between spouses/partners
- If preparing returns jointly, use the "Share with" field to allocate the remaining share
Special situations:
- Partial use as principal residence:
- Split selling price and adjusted cost base between residential and income-producing parts
- Report only the income-producing portion for capital gains calculation
- Change in use (e.g., from residence to rental):
- You're considered to have sold and reacquired the property at fair market value
- Report the gains only for years it wasn't your principal residence
- Some exceptions apply to change in use rules
- Multiple home sales in one year:
- Use the "Add another principal residence" button for each property
- Overlapping ownership when moving:
- The "Plus 1" rule allows both properties to be eligible for exemption in the year of sale/purchase
- For longer overlaps, choose the designation that provides the best tax advantage
Remember:
- Wealthsimple Tax will calculate any necessary capital gains and complete the T2091 form
- Keep all documents related to the sale of your principal residence
Common questions
Only part of my home was my principal residence, how do I report this?
If only a part of your home qualifies as your principal residence and you used the other part to earn or produce income, you have to split the selling price and the adjusted cost base between the part you used for your principal residence and the part you used for other purposes (for example, rental or business). How you split these does not necessarily have to be based on the size of each space - also take into account any factors which could affect the relative value of either part of the home. Enter the proceeds of disposition and adjusted cost base into Wealthsimple Tax for the part of the home that was used to earn income so that the capital gain can be calculated on those values only.
The CRA will consider the entire property to be considered your principal residence even though you have used it for income-producing purposes when all of the following conditions are met:
- The income-producing use is ancillary to the main use of the property as a residence.
- There is no structural change to the property.
- No capital cost allowance is claimed on the property.
My home became a rental or business property or vice versa (change in use), how do I report this?
Every time you change the way you use a property, you are considered to have sold the property at its fair market value and to have immediately reacquired the property for the same amount.
If the property was your principal residence for any year you owned it before its change in use, you do not have to pay tax on any gain that relates to those years. You only have to report the gain that relates to the years your home was not your principal residence.
There are special situations where the change in use rules don’t apply.
I sold my half of the home to my ex-partner, how do I report this?
Enter the amount that you sold the house to your ex-partner in the Proceeds of disposition field. If the home was not your principal residence for all the years you owned it, you will also pro-rate the adjusted cost base to your percentage of ownership for the time you owned it.
I moved homes more than once in the same year, how do I report this?
If you sold more than one property in the same calendar year and each property was, at one time, your principal residence, you must show this by completing a separate Form T2091(IND). Click the Add another principal residence button at the bottom of the Sale of principal residence section for each property sold in the year.
I bought a new home but my old home didn’t sell immediately, how do I report this
When you sell your home, there may be an overlap period where you own both homes. The CRA recognizes this common scenario and there is a special rule (the “plus 1” rule) that allows a taxpayer to treat both properties as eligible for the principal residence exemption for a year where one residence is sold and another is purchased in the same year, even though only one of them may be designated as such for that year.
If you owned both homes for more than a year and did not use the vacant home for any purpose (for example, you didn’t rent it out), you will have to decide which home you want to declare as your principal residence for the overlapping years beyond that first year. Determine the capital gain on the sold home and the anticipated capital gain on the new home. For the overlapping years, declare the home that gives you the best fiscal advantage as your principal residence.
If you have questions about reporting the sale of your principal residence, consider consulting with a tax expert. If you need assistance entering this information in Wealthsimple Tax, please contact Wealthsimple support.
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