How the personal-residence exemption can help minimize taxes on your cottage
Explains partial designation strategies and coordination across spouses.
Summary of Tim Cestnick — The Globe and Mail (Tax Matters). The Globe and Mail. Read the original.
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What it covers
This article explains how the principal residence exemption (PRE) can be used, even when a family owns more than one property. Cestnick walks through the PRE formula, discusses the so-called “+1 year,” and shows how partial designations can shelter part of a cottage gain. He also emphasizes the need for spouses to align on which property is designated for which years.
Why it matters
Misunderstanding PRE mechanics can either waste a valuable tax shield or create inconsistent reporting across family members.
Cottagr takeaway
Keep a running PRE log for your household. Record which property is effectively treated as the principal residence for each year, and revisit this record before large transactions.
Summary of Tim Cestnick — The Globe and Mail (Tax Matters) — The Globe and Mail