This question causes more unnecessary worry than almost any other in the downsizing conversation. For most homeowners selling their primary residence, the answer is no.
The basics: Canada's principal residence exemption generally shields the sale of your main home from capital gains tax, provided it's been your primary residence for the years you owned it.
When it gets more complex: If you've rented out part of the home, used it for business, or own multiple properties, the exemption may only apply partially — that's a conversation for your accountant, not a blog post.
Bottom line: Most family-home sellers keep their full equity tax-free — but confirm your specific situation with a tax professional before you plan around it.
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