If you claim capital cost allowance (CCA) on the principal residence it can have a serious effect on your principal residence exemption. If you are claiming CCA on the property, sometimes you cannot file a subsection 45(2) election. Further, a partial capital gain is taxed on such properties for the portion of the house on which CCA is claimed. It is always better to consult a professional tax preparer if you have rental income and tend to claim CCA on capital expenses.