In order to qualify to claim the principal residence exemption on sale of a principal residence there is a new requirement as of 2016, that the CRA Form T2091 be completed and submitted. The disposition of the principal residence also has to be shown on Schedule 3 of the T1 personal tax return for the year of disposition. The T2091form specifies the years for which the principal residence exemption is being claimed. Failure to submit the T2091election form gives rise to a penalty. A late-filed principal residence exemption election is generally subject to a late-filing penalty of $100 per month, not to exceed $8,000.
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