I have a client who purchased a home with his Mother several years ago. They are joint tenants. He recently disposed of his principal residence in another Province, and now lives with his mother in the house they pruchased together. It has been her principal residence since the house was purchased. The Mother is 98 - on her death the house will transfer to the son. What happens with the son’s final disposition. Will it be considered principal residence for the entire time my client had an interest, or will the period during which he had another principal residence reduce the number of years he can claim it as a principall residence.?
If the son is claiming a principal residence exemption on the house he recently disposed of then the number of years he designated on form T2091 for that house will reduce the number of years that he can designate as principal residence for any other property he may have owned.
Of course, depending on the circumstances in which he became a co-owner in the house he purchased with his mother, he may or may not have a beneficial interest in the property that she lives in.
Questions such as did they each contribute financially towards the house she lives in? Did he put any money down when they purchased it, was there a mortgage? If they had a mortgage, did he help make any of the payments? Did he help pay any of the current expenses (heat, electricity, water, taxes, insurance, repairs etc)? If he did not help financially towards the house then what was the reasoning for having his name on title?
It couldn’t be because he already designated another property for those years.
It seems reasonable that the mother claim the entire property as her principal residence for the entire time she lived there. They are both adults and can claim separate principal residences (see folio Income Tax Folio S1-F3-C2, Principal Residence - Canada.ca) Joint tenancy is different than tenants in common whereby a joint tenant still has full rights to the property (not just their 50% share). As the mother had full rights to the property and lived there for the entire time, I see no reason why she can’t take the full PRE.