The exemption covers only the home you actually lived in, so a downsizer selling a rental property or a cottage alongside their principal residence does owe tax on that second property's gain, fully, with none of the shelter the main home gets.
Saskatchewan adds no land transfer tax on the smaller home you are buying, so the closing costs on the purchase side are limited to the Information Services Corporation title transfer fee and legal fees, typically $800 to $1,500, not a percentage of the price.
Knowing which of your properties actually qualifies as a principal residence, and what each is worth, is worth settling before either sale is listed. Get your hand-reviewed valuation from Joel Dyck.