Tax Reporting of Your Principal Residence
If you have sold your principal residence you must report this sale on your income tax return. Contrary to the advice you may receive from family and friends otherwise, you must comply with the CRA’s requirements for reporting the sale of your primary residence. This was not always the case and as such you may be informed by a relative or friend that they did not have to report the sale of their primary residence when they sold. This can be entirely true if they sold their primary residence prior to January 1, 2016.
The CRA however does allow the principal residence exemption if you report the sale and designate the principal residence on your income tax return. The consequences of a failure to do so could be that you may not be allowed to claim the exemption. There may be allowance to go back and amend your income tax return if this was missed, however penalties may apply.
All questions regarding the reporting requirements should be directed to your tax adviser. You may also obtain additional information from the Canada Revenue Agency by telephone at 1-800-959-8281 (from Canada and the United States) or through their website https://www.canada.ca/en.html.
Post Your Comment: