Firm News: 40% of our lawyers recognized by Best Lawyers
Tuesday December 6, 2016

New CRA Reporting Requirements for the Sale of your Principal Residence

Posted in: Real Estate

The CRA has implemented new reporting requirements for the sale of a principal residence. While you will still not have to pay tax on the sale of your home, if it meets the principal residence exemption requirements, you will have to report the sale of your principal for any sale on or after January 1, 2016. This will be reported on Schedule 3, Capital Gains of the T1 Income Tax and Benefit Return and you will need to include the date of acquisition, proceeds of disposition, and a description of the property.

What happens if you do not report the sale of a Principal Residence?

If you fail to report the sale of a principal residence, you will not be able to utilize the principal residence exemption that applies to your property, which could result in you having to pay tax on any gain from the sale.

If you forget to make a designation of your principal residence in the year that you sell it, the CRA can accept a late designation in certain circumstances. If you do forget to report the sale, it is important to contact the CRA to have your income tax return amended for that year. While the CRA may accept a late designation, the CRA does have the authority to apply the following penalty, which would be the lesser of either:

The CRA has said that for the sale of principal residences during the 2016 tax year, the penalty for a late-filing of a principal residence designation will only be assessed in the most excessive cases. To avoid even the chance of having to pay this penalty, include the sale of your principal residence on your income tax return, but if you forget, immediately notify the CRA to request that your income tax return be amended.

Share This Post:

Ask a question about this post.

Any Questions

Recent Blog Posts

Blog Post | Wednesday February 24, 2021

Who Owns the IP? Is it the Employer or the Employee?

Posted in: Business Law

Intellectual Property (IP) ownership rules determine whether an Employer or an Employee holds rights to the creation at hand. Although IP covers a broad range of federal laws and statutory rights, the three most relevant to Employers in Canada are Patents, Copyright and Trademarks.

Read full article
Blog Post | Wednesday February 17, 2021

Trademark Usage: Simple Rules of the Road

Posted in: Business Law

The display of trademarks causes a tension between legal requirements and marketing priorities. It often requires a delicate balancing of trademark notices and visual appearance considerations.

Read full article