Short answer
Potentially. For dispositions after 2022, profit on a residential property held for fewer than 365 consecutive days is generally deemed business income unless a legislated life-event exception applies.
Why this question matters
A homeowner must sell sooner than expected and assumes the principal-residence exemption will always shelter the gain. The tax outcome may be very different from a normal long-term home sale.
What the official rule or guidance says
CRA’s principal-residence guidance explains the residential property flipping rule and its exceptions for specified events such as death, household addition, separation, disability, work relocation, insolvency or destruction, subject to the statutory conditions.
What this does not mean
Holding for 365 days does not automatically make every later gain a capital gain; intention and surrounding facts still matter. Selling sooner does not automatically mean no exception applies. A lender or broker cannot determine the tax result.
A practical Ontario example
Illustration only: A buyer closes, then sells eight months later after a genuine job relocation. The sale falls inside 365 days, but a statutory exception may be relevant. Documentation and professional tax advice are essential.
Practical next steps
Before listing, ask an accountant about the rule, exception evidence, adjusted cost base and reporting. If the sale is driven by payment pressure, compare a temporary mortgage solution against the tax, penalty and transaction costs—but do not borrow merely to postpone an unavoidable sale.
Questions to ask before relying on the answer
- Is this an insurer, tax, legal, regulator or individual lender rule?
- Does it apply to an insured, insurable or uninsurable mortgage?
- How will the lender document and calculate the rent on this exact property?
- Which facts are confirmed, and which are still assumptions?
- What is the lowest-cost workable path through A, alternative/B, MIC or private lending?
Rajiv’s broker perspective
Rental files should be tested, not guessed. I would separate the legal and tax questions from the mortgage calculation, prepare one clean property schedule and then compare suitable lender policies. A strong result is not simply the largest approval—it is a mortgage the client can carry through vacancy, repairs, renewal and a realistic exit.
Related: Mortgage Knowledge Centre · Real Estate Centre · Updates & Rules Centre
Want the rental file tested before you make a decision?
Bring the property numbers, current mortgages and income documents. Rajiv can compare the practical A, alternative/B, MIC and private paths and identify which questions need an accountant or lawyer.