Sold your home? The tax man wants to know

The CRA now requires taxpayers to report the sale of a principal residence on their tax returns. Make sure you understand what the new rules mean.

Matthew Elder 21 August, 2017 | 5:00PM

The Canada Revenue Agency has increased its vigilance of real estate transactions during the past several years, aiming to increase compliance on the part of those who sell properties without reporting the gain or profit, and not paying the resulting tax.

As a result, during the two years ended in June 2017, the CRA levied more than 1,000 penalties related to real-estate transactions, totalling $23.1 million. The highest individual penalty was nearly $2.5 million. Most of these were in Ontario and British Columbia, markets that the CRA had targeted because they have been the most active and expensive, and popular among foreign investors.

While the authorities are mostly investigating property flips (quick purchases and resales), sales by non-residents, and those who fail to pay sales tax on the purchase of a newly constructed (or substantially renovated) building, it also is keeping a closer eye on principal residence sales.

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Matthew Elder

Matthew Elder