Canada Cracking Down On Real Estate Tax Evasion
The Canada Revenue Agency (CRA) has said that audits it undertook between April 2015 and March 2017 of real estate transactions resulted in more than CAD329.4m (USD249.2m) in assessed income that had not been reported.
The CRA said that, during this period, it completed over 21,000 audit files related to real estate. Files are selected for audit based on the risk of non-compliance.
In addition, the CRA applied over CAD17m in penalties, primarily associated with the real estate markets in Toronto and Vancouver. It said that it has in recent years increased its audits in both these areas, having observed an increase in real estate speculation.
As of the 2016 tax year, Canadians must report to the CRA the sale of any principal residence, to ensure that only eligible homeowners receive tax benefits.
The CRA said that it will continue to strengthen its relationships with the provinces, territories, and municipalities to further expand, obtain, and exchange information on real estate transactions. It explained that this will enhance its ability to combat tax evasion and avoidance.
Revenue Minister Diane Lebouthilier commented: “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 rules.”