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Alberta real estate transactions: Taking advantage of the PRE

When an individual sells a property, there are some tax breaks of which he or she can take advantage. When it comes to real estate transactions in Alberta, residents can claim a principal residence exemption (PRE) on the sale of their properties. But there are some things they should know before doing so such as being aware of any changes to the Canada Revenue Agency's requirements. 

Homeowners are given an exemption from the capital gain they earned on the sale of a principal property. In order to take advantage of the PRE, the property must be the principal residence of the owner. The principal residence is defined as being lived in by the owner, spouse and/or children, must be a housing unit and known as the owner's primary residence. A cottage or cabin can also qualify in many instances.

The amount of land is limited in order to qualify for the PRE -- up to a hectare or 2.47 acres. There is some wiggle room such as if the extra land was necessary for the housing unit to be enjoyed by the owner. If a property owner applies for the PRE in such situations and can't prove the extra land fulfilled the rules of the PRE, the issue may end up in court.

An Alberta lawyer experienced in real estate transactions is able to offer guidance to clients regarding the issues that accompany the buying and selling of property. Many residents are unaware of these laws and having legal counsel may save them making some potential costly mistakes. A lawyer is aware of the laws surrounding real estate dealings and can impart them to his or her clients.

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