Principal Residence Declarations

May 29/18

Since 2016, Canada Revenue Agency has required Canadian residents to report the sale of any principal residence on their tax returns. If you sell your home and report it on your tax return, you should not have any problems with CRA, provided the home was really your principal residence.

Recently, CRA was advertising that they have collected substantial sums of income tax and penalties from residents of Ontario and British Colombia who have failed to report the sale of property.  These people are most often individuals who are flipping a house, they buy and sell the property within a short period of time. They would not qualify for the principal residence deduction as their intention was to make money from the sale of the property. They did not have an intention to live in the property in the long term.

If your family only owns one property then that property would be your principal residence and you have nothing to worry about. If you own more than one property, seek professional advice to make sure that you understand which property is going to give rise to a taxable gain when you sell it.

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