The CRA Rental Income Tax Guide, T4036, and S1-F3-C2: Principal Residence (see partial changes in use) state that if all of the following conditions are met, you will not be considered to have a change in use:
- the part of the home used for rental purposes is small in relation to the size of the whole property,
- you do not make any structural changes to the property to make it more suitable for rental purposes, and
- you do not claim any capital cost allowance on the part you are using for rental purposes.
If all of the above conditions are met, you will not have to report a capital gain when the property is sold or the rental is stopped.