Regulation 2301

Reporting requirement

2.15 According to section 2301 of the Regulations, a taxpayer’s designation of a property as a principal residence for one or more tax years is to be made in his or her income tax return for the tax year in which he or she has disposed of the property or granted an option to another person to acquire the property. Beginning with the 2016 tax year, taxpayers who sell their principal residence are required to report certain basic information with their tax return. Where the property is designated as a principal residence for all the years it was owned, the designation form for individuals (other than trusts) for the 2016 tax year is Schedule 3 of the T1 income tax and benefit return (which is revised for this purpose). The information required includes the address of the property, the date it was acquired and the amount of the proceeds of disposition. This reporting is necessary in order to claim the full principal residence exemption.