Affordable Accounting and Bookkeeping
Tax Evasion In The Real Estate
$329.4 Million In Assessed Income That Had Not Been Reported
Canadian government knows full well the benefits of a healthy, competitive and stable housing market for its citizens, therefore, works tirelessly to ensure sanity and equity. The government has taken stringent and significant steps to curb and eliminate tax evasion in the real estate dealings.
Real estate audits in recent times have experienced the increase in greater Vancouver and the greater Toronto areas. This great step by Canada revenue agency (CRA) is in the right direction as there was improvement noticed in real estate speculation.
To this effect, the Canadian government has instructed that all Canadians are starting from the 2016 tax year to report the sale of any principal residence. Reporting sales of a primary residence will enable only eligible homeowners to earn the tax benefits.
Statistics show that between April 2015 to March 2017 a total of $329.4 million was realized from income of residence sales but was never reported. Two big real estate markets in Toronto and Vancouver were fined up to $17 million for evading reports of sales made.
The Canadian government through the Canada revenue agency recognizes how hard citizen work for their money, therefore, ensures they get the best they deserve. CRA will continue to encourage its efforts towards establishing a close relationship with territories, provinces, and municipals to get accurate data on real estate transaction. This way, reducing the rate of tax evasion and encouraging accountability in totality for every transaction in the real estate and housing sector.
«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
- The Canadian government on October 3, 2016, made a change in the administration of Canada revenue agency reporting requirements for the sale of a principal residence. Details of this announcement can be accessed here.
- The policy for builders of new apartments and rental properties are as follows: They are to collect and remit the Gst/HST to the CRA when properties are sold. They should report to the CRA when rental properties are rented out for the first time, personal property is inclusive. Also, purchase of new residence should be reported to the CRA as well.
- Over 21000 files related to real estate from April 2015 to March 2017 were suspected from the audit to be not compliant. This indeed shows commitment to ensure absolute compliance with rules and regulation in the real latest sector.
- Details of the CRA’s audit activities can be found at: How does the Canada Revenue Agency address noncompliance in the real estate industry?