New Tax Reporting Regulations For Principle Residence Sales

(December 29, 2016 )

THE BC HOME HUNTER GROUP l AWARD WINNING URBAN & SUBURBAN METRO VANCOUVER l FRASER VALLEY l WEST COAST l BC REAL ESTATE 604-767-6736 #BCHOMEHUNTER.COM  #Vancouver #WhiteRock #SouthSurrey #WestVancouver #Langley #MapleRidge #NorthVancouver #Langley #FraserValley #Burnaby #FortLangley #PittMeadows #Delta #Richmond #CoalHarbour #Surrey #Abbotsford #FraserValley #Kerrisdale #Cloverdale #Coquitlam #EastVan #Richmond #PortMoody #Yaletown #CrescentBeach #Clayton #MorganCreek #FraserValleyHomeHunter #VancouverHomeHunter #OceanPark #MorganHeights #GrandviewHeights #LynnValley #Lonsdale #VancouverHomeHunter #FraserValleyHomeHunter #BCHHRealty.com  @BCHOMEHUNTER  THE BC HOME HUNTER GROUP  AWARD WINNING URBAN & SUBURBAN REAL ESTATE TEAM WITH HEART 604-767-6736  METRO VANCOUVER I FRASER VALLEY I BC  What's in your beautiful B.C. backyard ?  Look for our trademarkedNew Real Estate Tax Reporting Rules in British Columbia and Canada.

2016 has seen an unprecidented level of anti real estate rhetoric and draconian intervention by literally all levels of government. It has never been more important to anyone purchasing or selling their home or any real estate that you have true experts representing and looking out for you.

Our team of real estate advisors have always known that the principal residence capital gains tax exemption rules are much more complex than the general public can grasp. Until recently, there have been no reporting requirements on fully tax-exempted gain on the sale of a principal residence which only distorted the taxpayer’s sense of ease and entitlement of the exemption.

Although Ottawa changed the reporting rules on October 3, 2016, the new reporting rules will apply to any principal residence sold during the 2016 calendar year. Any principal residence sold on January 1, 2016 and later will now have to be reported on personal tax returns even if the entire gain is exempted by the principal residence exemption.

List of New Rules.
Although the final details have not been released, here are some of the new rules:

Every sale must be reported even if fully exempted under the principal residence exemption designation.

The Canada Revenue Agency (CRA) will only allow the principal residence exemption on the reported sale.
Late principal residence designations will be subject to penalties.

The normal three-year limitation period for auditing and reassessing a taxpayer’s return will not apply to an unreported sale of a principal residence. In fact, this limitation period is extended indefinitely for this type of THE BC HOME HUNTER GROUP l AWARD WINNING URBAN & SUBURBAN METRO VANCOUVER l FRASER VALLEY l WEST COAST l BC REAL ESTATE 604-767-6736 #BCHOMEHUNTER.COM  #Vancouver #WhiteRock #SouthSurrey #WestVancouver #Langley #MapleRidge #NorthVancouver #Langley #FraserValley #Burnaby #FortLangley #PittMeadows #Delta #Richmond #CoalHarbour #Surrey #Abbotsford #FraserValley #Kerrisdale #Cloverdale #Coquitlam #EastVan #Richmond #PortMoody #Yaletown #CrescentBeach #Clayton #MorganCreek #FraserValleyHomeHunter #VancouverHomeHunter #OceanPark #MorganHeights #GrandviewHeights #LynnValley #Lonsdale #VancouverHomeHunter #FraserValleyHomeHunter #BCHHRealty.com  @BCHOMEHUNTER  THE BC HOME HUNTER GROUP  AWARD WINNING URBAN & SUBURBAN REAL ESTATE TEAM WITH HEART 604-767-6736  METRO VANCOUVER I FRASER VALLEY I BC  What's in your beautiful B.C. backyard ?  Look for our trademarkedtransaction.

A change in use occurs when a principal residence becomes a rental operation and vice versa. The new reporting rules also apply to “a change in use”.
Relation to CRA Tax Audits

The above reporting changes are significant and affect many taxpayers.

Requiring every sale to be reported, irrespective of the full exemption, allows the CRA to monitor real estate transactions under each taxpayer account easily. The result is that, compared to the old rules, audit selection will now be relatively straightforward for the CRA.

Many taxpayers don’t fully appreciate the complexities behind the principal residence capital gains tax exemption rules and many claim the exemption automatically irrespective of entitlement under the Income Tax Act. Time will tell if the CRA can fully utilize the additional information being reported to enforce compliance and encourage a better understanding of the rules behind the principal residence capital gains tax exemption. 

Our real estate group are forecasting further levels of interventionism and attempts to manipulate the metro Vancouver, Fraser Valley, British Columbia and Canadian real estate markets by all levels of government and special interest groups. Don't hesitate to contact us anytime to buy or sell your home or for straight forward answers to any real estate questions you may have, 604-767-6736.THE BC HOME HUNTER GROUP l AWARD WINNING URBAN & SUBURBAN METRO VANCOUVER l FRASER VALLEY l WEST COAST l BC REAL ESTATE 604-767-6736 #BCHOMEHUNTER.COM  #Vancouver #WhiteRock #SouthSurrey #WestVancouver #Langley #MapleRidge #NorthVancouver #Langley #FraserValley #Burnaby #FortLangley #PittMeadows #Delta #Richmond #CoalHarbour #Surrey #Abbotsford #FraserValley #Kerrisdale #Cloverdale #Coquitlam #EastVan #Richmond #PortMoody #Yaletown #CrescentBeach #Clayton #MorganCreek #FraserValleyHomeHunter #VancouverHomeHunter #OceanPark #MorganHeights #GrandviewHeights #LynnValley #Lonsdale #VancouverHomeHunter #FraserValleyHomeHunter #BCHHRealty.com  @BCHOMEHUNTER  THE BC HOME HUNTER GROUP  AWARD WINNING URBAN & SUBURBAN REAL ESTATE TEAM WITH HEART 604-767-6736  METRO VANCOUVER I FRASER VALLEY I BC  What's in your beautiful B.C. backyard ?  Look for our trademarked

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