Photo by 416style

How do we make the cottage our “principal residence”?

Share This Story!

How do we designate the cottage as our “principal residence”? —Caleigh MacMillan, Kawartha Lakes, Ont.

It’s a matter of filing the appropriate form through the Canada Revenue Agency (see the form Designation of a Property as a Principal Residence by an Individual. But keep in mind that you don’t need to do this unless you’re reporting a capital gain because the cottage has changed ownership—for example, if it’s been sold to a third party, or if it’s been gifted from a parent to a child. Also, you don’t file this form beforehand, you file it in the year after the disposition of the property, when or if you’re reporting a capital gain for that tax year. For more on all of this, check out the CRA’s info on capital gains and principal residence. It’s not what anyone would call a gripping read…but it is valuable.