OTTAWA, June 16, 2017 /CNW/ - The Government of Canada recognizes the importance of ensuring a healthy, competitive, and stable housing market for all Canadians, while also working to improve tax fairness. To that end, the Government of Canada has taken significant steps to address tax cheating in real estate transactions.
In recent years, the Canada Revenue Agency (CRA) has increased its real estate audits in both the Greater Vancouver and the Greater Toronto areas as increased real estate speculation was observed. In addition, starting with the 2016 tax year, the Government of Canada requires that Canadians report to the CRA the sale of any principal residence to ensure that only eligible homeowners get tax benefits.
From April 2015 to March 2017, the CRA audits of real estate transactions resulted in more than $329.4 million in assessed income that had not been reported. During this time, the CRA applied over $17 million in penalties, primarily associated with Canada's two major real estate markets in Toronto and Vancouver.
Canadians work hard for their money and the Government of Canada recognizes that many families count their principal residence as both their home and most valued asset. The CRA will continue to strengthen relationships with key partners such as provinces, territories, and municipalities to further expand, obtain, and exchange information on real estate transactions, thereby enhancing the CRA's ability to combat tax evasion and avoidance.
"For many Canadians, buying a home is one of their proudest moments and represents one of their most important investments. Our Government has committed to protecting the fairness and integrity of the tax system for all Canadians, notably by cracking down on tax cheating in real estate transactions. This means that, without exception, every taxpayer abides by the same tax laws."
- The Honourable Diane Lebouthillier, Minister of National Revenue
- On October 3, 2016, the Government announced an administrative change to the Canada Revenue Agency's reporting requirements for the sale of a principal residence. For more information, go to Reporting the sale of your principal residence for individuals (other than trusts).
- Builders of new residences or rental properties are required to collect and remit the GST/HST to the CRA when they sell, rent out for the first time, or appropriate the property for personal use. Additionally, purchasers of new residences must ensure they abide by the rules when applying for new housing rebates.
- From April 2015 to March 2017, the CRA completed over 21,000 files related to real estate. Files are selected for audit based on the risk of non-compliance. The CRA plans to continue enhancing its compliance procedures in the real estate sector.
- Details of the CRA's audit activities can be found at: How does the Canada Revenue Agency address non-compliance in the real estate sector?
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SOURCE Canada Revenue Agency
Renseignements: Chloé Luciani-Girouard, Press Secretary, Office of the Minister of National Revenue 613-995-2960; Media Relations, Canada Revenue Agency, 613-952-9184