Form T2091(IND) is the CRA form an individual uses to designate a property as their principal residence and work out any capital gain when they sell it. You also have to complete the principal residence designation section of Schedule 3 for the year you dispose of the home. If the home was your principal residence for every year you owned it, you usually only fill in the description section and report no gain.
This is the form that turns the principal residence exemption from an idea into a claim. Everything below comes from the 2025 version of the form and the CRA's form page, as of October 2026.
When you need T2091(IND)
- You sold, or were considered to have sold, your principal residence or part of it.
- You granted someone an option to buy your principal residence or part of it.
- You're designating a property for only some of the years you owned it, so part of the gain is taxable.
If you file electronically, keep the form in case the CRA asks to see it. If you file on paper, you must complete, sign and attach it to your return.
Which box you tick on Schedule 3
| Line 17900 of Schedule 3 | What you complete on T2091(IND) |
|---|---|
| Box 1 ticked | Only Section 1, Description of property. No gain to report for this property |
| Box 2 or box 3 ticked | Section 1 plus Section 2, Calculation of capital gain |
Section 1 asks for the address, year of acquisition and proceeds of disposition. If you owned the home jointly, enter only your share of the proceeds. If part of it was used for rental or business purposes, enter only the share for the part you used as your home.
One home per year, with a plus one
You can only designate one property as your principal residence for any given year. When you sell one home and buy another in the same year, the "plus one" rule in the exemption formula lets you shelter both for that year even though only one is designated. There's an exception: for dispositions after October 2, 2016, the plus one doesn't apply if you were a non-resident throughout the year you bought the property.
The designation also covers your family unit for years after 1981. You confirm that your spouse or common-law partner (unless separated) and your unmarried children under 18 didn't designate another property for those years.
The flipping rule most people haven't heard of
For dispositions after 2022, a housing unit in Canada that you owned for less than 365 consecutive days before selling is generally a flipped property, unless it was already inventory. The gain is taxed as business income, not as a capital gain, so you can't use the principal residence exemption on it at all. There are exceptions for sales due to, or in anticipation of, certain life events, explained in Guide T4037. If you're selling within a year of buying, check this before you assume the sale is tax free.
How the exemption is worked out
- Count the tax years you're designating the property for (line 4) and the years you owned it after the acquisition date (line 7).
- Work out the capital gain before the exemption: proceeds minus adjusted cost base and selling costs (line 18).
- Multiply that gain by the designated years plus one (line 20), then divide by the years owned (line 22). That's the exempt portion.
- Subtract the exempt portion from the gain to get the net capital gain (line 24). If it's negative, enter zero.
Designate every year you owned the home and the fraction comes out at more than one, so the whole gain is sheltered. Designate fewer years, because you lived somewhere else for part of the time, and the fraction drops below one and part of the gain becomes taxable. The extra year is what gives you room when you move.
Special cases on the form
- The acquisition date is the later of December 31, 1971, and the date you acquired or last reacquired the property.
- If you or your spouse filed Form T664 or T664(Seniors) for the 1994 capital gains election, you use this form to calculate the gain, and Form T2091(IND)-WS may give you a reduction.
- If you weren't resident in Canada for the whole time you owned the property, the CRA asks you to call 1-800-959-8281, because non-residence can reduce or eliminate the exemption.
- Part 2 of Section 2 only applies to homes a family member owned on December 31, 1981, and continuously after, when the family had two or more qualifying properties.
If you rented out part of the home, that portion is outside the exemption, and the rental income itself is reported separately. There's more on how rental properties work as income, and investment income from your savings arrives on a T5 slip rather than through this form.
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The verdict
If you've sold your home, you need to report the designation even when no tax is due. That's the step people skip, because the gain is exempt and it feels like there's nothing to report. Tick the right box on Schedule 3, fill in Section 1 of T2091(IND), and only work through the formula if the home wasn't your principal residence for every year. If you've owned it for less than a year, read the flipping rule first.
Frequently asked questions
What is Form T2091(IND)?
It's the CRA form individuals use to designate a property as a principal residence and to calculate any capital gain on its sale.
Do I need T2091 if my home was my principal residence every year?
You complete the principal residence designation on Schedule 3. If you tick box 1 at line 17900, you only need Section 1 of T2091(IND) and report no gain.
Can I designate two homes as my principal residence?
No. You can only designate one property for any year, but the plus one rule lets you shelter both homes in the year you sell one and buy another.
What is the 365-day flipping rule?
For sales after 2022, a home owned for less than 365 consecutive days is generally a flipped property. The gain is business income and the principal residence exemption can't be used, with exceptions for certain life events.
Do I attach T2091 to my tax return?
Only if you file on paper. If you file electronically, keep the form in case the CRA asks for it.
