A taxpayer inhabited as a principal residence a unit of a taxpayer-owned duplex and integrates that unit, through major renovations, with the other unit in the duplex that was, before those renovations, rented to third parties.
CRA stated:
An immovable is normally considered to be a single property unless it is legally subdivided into two or more separate properties.
Accordingly:
With respect to the submitted situation … there was a partial change of use of the portion of the duplex used for another purpose at the time that portion began to be used in its entirety for personal purposes. Consequently, subparagraph 45(1)(c)(i) would apply so that, in this situation, the partial change-in-use rule in s. 45(1)(c) would be considered to apply.