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So the second home is more of a problem: to stop you from trying to claim a separate exemption for another home by putting it in the name of a child, children are restricted from claiming the exemption unless they have reached eighteen in the year or are married. As a general rule, a family can claim the PRE on only one home at a time.Restrictions will also apply if part or all of your home is rented out or is not used by a family member, or if you have not been resident in Canada throughout the period of ownership (other than in the year of purchase).This may be quite relevant if your cottage or second home is located on a large piece of land or island. To claim the PRE on a large lot (over ½ hectare, or about 1¼ acres), you must be in a position to establish that the land over half a hectare is necessary for the “use and enjoyment” of your home.Ordinarily occupied can also include a vacation home that is used by you and your family. The home must be ordinarily occupied for personal use by you, your spouse or former spouse, or a child at some time during the year.In order to take advantage of the principal residence exemption (PRE), certain requirements must be met: So I thought it would be worthwhile to go through a refresher of the rules as they relate to the principal residence exemption. And a question I get from both purchasers and sellers is whether the principal residence exemption can be used to shelter the capital gain on a cottage property. And if you are on the selling side, you likely have benefitted from the high demand for properties. So the idea of having your laptop set up on the dock of your second home is definitely appealing. City folk are eager to get leave for a change of scenery, especially since many people are still working from home. Don’t pay more capital gains tax than you have toįrom what I have read, the demand for cottage properties has soared during the COVID-19 pandemic.