According to a report by Globe and Mail (by: Tim Cestnick) "The tax rules around principal residences are so complex that many Canadians simply don’t recognize when they might owe tax when they sell a property. Many have assumed that every sale of a residence is always tax-free thanks to the principal-residence exemption (PRE). And the taxman has not required Canadians to report the sale of a principal residence if the PRE will shelter the full gain from tax. The result has been that many have sold residences, have not reported the sale, have paid no tax, even in situations where tax should have been owing. These dispositions have gone largely undetected by the taxman. That’s changing."/p>
So, what does this mean for our clients? Under these new rules, you are now required to report every sale of a principal residence on your 2016 tax return (even if you don't owe tax). Understanding the principal residence rules can be quite complicated, and that it why it is very important to discuss any changes to property with your accountant come tax time. We've also had clients in Vancouver and North Vancouver contact us regarding concerns about what type of documents to keep regarding the sale of their property. We remind these clients that keeping all receipts and invoices, and any other documents related to the sale or transfer of property is helpful. /p>
Our accountants have been following these developments closely, and are happy to answer any questions you might have. /p>
**Globe and Mail Article: http://www.theglobeandmail.com/globe-investor/personal-finance/taxes/how-new-tax-changes-will-impact-every-canadian-homeowner/article32271116/
Crystal Cahill
Crystal Cahill is responsible for the social media and marketing at Cahill CPA. Crystal completed her Bachelor of Arts Degree at Simon Fraser University in English, and has an Education Degree and teaching certification. She enjoys keeping clients updated on new accounting practices, upcoming tax deadlines, and news & events within the Cahill CPA office & staff. She is married to Cahill CPA partner Jordan Cahill, and together they have two young children.
