After Monsieur acquired a duplex in January 2011, he used the two units for renting to a third party and as his personal residence, respectively. In July 2019 he ceased to rent out the first unit, and appropriated it to his residence. By making a s. 45(3) election respecting his change of use under s. 45(1)(c) (as permitted by the 2019 Budget changes), he was deemed to have not disposed of that unit.
If he disposed of the duplex in December 2022, how is he to compute the principal residence exemption? After noting that the duplex was a single property, even though it included two housing units, CRA responded:
[T]here are three housing units in the immovable over the years, namely the unit that the taxpayer rented from 2011 to 2019 (Unit 1), the one in which the taxpayer lived from 2011 to 2019 (Unit 2) and the housing unit resulting from the 2019 in which the taxpayer lived from that time on (Unit 3).
Where more than one housing unit in an immovable is eligible for a principal residence designation for different years, the taxpayer must file with the taxpayer’s income tax return for the taxation year of the disposition of the property a T2091IND-WS Principal Residence Worksheet, and designation form T2091 (IND) - Designation of a Property as a Principal Residence by an Individual (Other than a Personal Trust) for each of the units in the immovable that are the subject of a designation.
The taxpayer will therefore have to file two worksheets and two T2091 forms … if the taxpayer wishes to designate Unit 2 and Unit 3 as his principal residence for the applicable years.