The CRA has ramped up efforts to collect tax on real estate dispositions.
For years, many taxable property sales were unreported to the CRA, resulting in significant amounts of potential taxes going unpaid.
However, working in conjunction with provincial agencies in charge of property transfers, the CRA has uncovered substantial numbers of property sales that had not been reported, resulting in considerable amounts of tax and penalty assessments to taxpayers.
In 2017, the CRA reported penalty assessments of $17 million related to unreported real estate transactions.
By 2019, this amount has increased to $101 million.
In BC alone between April 2015 and March 2019, over $422 million was uncovered through the audit of real estate transactions, including income tax, GST, as well as related interest and penalties.
It is important to note that if a taxpayer has not reported a principal residence transaction for 2016 or 2017, they can still do so without any penalties applied.
However, the CRA has not stated whether they will allow late filings for 2018 or any future year. It is likely they will not be lenient with late filings for these years.
There are still no income taxes owing on the sale of a property that fully qualifies as a principal residence for the taxpayer.