CO2 heat pumps have drawn a great deal of attention as an economic form of heating under low ambient temperature conditions. However, the system performance is not desirable and shows a lower COP due to the higher inlet water temperature at the gas cooler, which causes a higher refrigerant temperature at the exit of the gas cooler, leading to a large throttle loss when the refrigerant flow through the throttling device. To tackle this issue, a transcritical CO2 heat pump unit integrated with two thermal energy storage (TES) containing phase change materials (PCMs) is proposed in this paper. The objective of this work is to model and simulate the proposed system using TRNSYS based on a typical single family rural house in Beijing (typical cold climate conditions), China. The results showed that the heating capacity and energy consumption decreased by 21 and 24%, respectively, and the heating seasonal performance factor (HSPF) of the proposed system increased by 4% in comparison with the baseline system during the entire heating period. The simulation results demonstrated that TES is helpful to improve CO2 heat pump system performance and monthly energy saving ratio for space heating.