Tuesday December 6, 2016

New CRA Reporting Requirements for the Sale of your Principal Residence

Authored by: Andrew P. Nicol 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 August 14, 2019

Five Things to Know Before Your Pre-Sentence Report

Authored by: Terrance G. Sheppard Posted in: Criminal Law

What should you expect before your pre-sentence report interview? Many people feel unsure. Your interview matters. Here are five things you should know to be prepared.

Read full article
Blog Post | Thursday August 8, 2019

Happily Ever After: The Marital Breakdown of Amazon Power Couple, Jeff and MacKenzie Bezos

Posted in: Family Law

Jeff Bezos, CEO of Amazon, and his wife MacKenzie made headlines in January 2019 when they jointly tweeted their plans to initiate divorce proceedings after 25 years of marriage.

Read full article
Blog Post | Monday July 29, 2019

What is an Easement?

Authored by: Allen A. Campbell Posted in: Real Estate

You may have purchased a property that is subject to an easement or contemplating purchasing one, and not know what that means.

Read full article
Blog Post | Wednesday July 24, 2019

Copyright Law: From Beyond the Grave

Authored by: Marc J. Belliveau Posted in: Intellectual Property

In Canada, the Copyright Act governs all matters related to an artist’s rights to her or his creative works, including how long those legal rights subsist and how they devolve upon the artist’s death.

Read full article