Question

N purchased a home in Toronto in Year 1. N was transferred by his employer from Toronto to Vancouver in Year 2. N was transferred back to his employer’s Toronto office and moved back into his Toronto home in Year 10. N sold his Toronto home in Year 15. During Years 2 to 10 the Toronto home was rented to a young couple through a rental agency. For how many of the Years 1 through 10 does the Toronto home qualify to be designated as a principal residence, assuming an election was made with N’s tax return for Year 2 not to recognize the change of use?

Answer 1

Based on the rules, the Toronto home will qualify to be designated as principal residence for all years from 1 to 10 because:

- Assuming N didn't designate any other property as principal residence.

- N is a resident or deemed to be a resident of Canada

- While there is a 4 year limit from the year of election, this can be extended indefinitely since the employer wants N to relocate, N is not related to the employer, the same employer sends back N to his home country or the original home is at least 40 kilometres (by the shortest public route) farther than the temporary residence from his or his spouse's or common-law partner's new place of employment.