ARTICLE · 08 JANUARY 2018

Tax Reporting Has Changed For Principal Residence Sales

Collins Barrow National Incorporated

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If you sell property, you are required to report the sale in your tax return. However, if the property you sell is your principal residence, the gain you realize on the sale is not taxable ...

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If you sell property, you are required to report the sale in your tax return. However, if the property you sell is your principal residence, the gain you realize on the sale is not taxable, as there is an exemption on the gain realized on a principal residence. In the past, Canada Revenue Agency's administrative policy was that you did not have to include the sale in your tax return if the property was your principal residence for all years it was owned. This policy changed in 2016, and CRA now requires everyone to report the sale in their tax return. While the sale of a principal residence is still tax free, there is a penalty if you fail to report the sale.

Requiring people to report the sale of all property allows CRA to monitor the activity and confirm the principal residence exemption is being properly applied. If you are selling your principal residence, understanding the intricacies of CRA's rules is crucial.

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