Since 2016, tax payers have been disclosing the disposition of their principal residence on their tax returns and claiming an exemption on any capital gains by filing the T2091. In 2022, CRA has started an educational letter campaign to people who have claimed the PRE on their 2018 and 2019 tax returns and who may not have been eligible to claim such an exemption. Over 1,700 letters were sent out to people who fit into two specific scenarios

Scenario 1: Tax payers who have claimed the PRE for two consecutive years in a row. It seems that the CRA is trying to identify those who are flipping properties and living in them for a short period of time.

Scenario 2: Tax payers who have claimed the PRE and have also reported gross rental income on their tax returns in the previous years. It seems that CRA is trying to identify those who have claimed PRE on rental properties.

These are educational letters and CRA is very polite in their language saying taxpayers may have claimed PRE in error and therefore giving a chance to the tax payer to review the claim with their accountant or tax practitioner and resubmit an amended tax return if the initial PRE claim was in fact an oversight.