New Tax Rules on Sale of Principal Residence
Effective October 3, 2016, new tax rules have been introduced concerning the sale of a principal residence and the principal residence exemption.
Here’s what’s new:
It used to be common practice to exclude the sale of a principal residence from your personal tax return due to its tax-free nature. The new rules require that every property disposition, regardless of whether there is any tax consequence, must be reported. As such, any sale of a principal residence in 2016 or later must be reported on your personal income tax return.
If the sale is not reported on your personal tax return, the CRA may audit and reassess your tax return. If filed late, you could be subject to a maximum penalty of $8,000.
For further information, feel free to contact us and we’ll be happy to answer any questions you may have.