What is the principal private residence exemption?
A gain accruing to you on the disposal of your main residence dwelling is exempt, provided you occupied or are deemed to have occupied the residence throughout your period of ownership, with the exception of the last 12 months of ownership.
If you did not occupy the residence throughout the ownership period, only the part of the gain represented by the part of your ownership period in which you occupied the residence is exempt. In apportioning the gain, the last 12 months are taken as part of the total ownership period.
If you were obliged to live abroad or elsewhere for employment reasons, you may be treated as having lived in the residence during the period of absence if you lived in the residence before and after that period.
If your residence was used partly for business purposes, only the residential part of the gain is exempt.
Up to one acre of adjoining grounds may be included as part of the residence. If part of the grounds is occupied with the residence, and part is not, the part most suitable for enjoyment with the residence is deemed to be part of the residence.