If you sold your home last year you have to report it on your taxes for the first time – Are you ready?

Published on in Realtor Insight

For the first time, Canadians who sold their homes in 2016 will have to report it to the Canada Revenue Agency, even though any gains remain tax-free if they’ve lived in the properties as long as they’ve owned them.

Basic information related to the transaction, the year of purchase, the proceeds of the sale and the description of the property must now be filled out on income tax returns.

On October 3, 2016, the Government announced an administrative change to Canada Revenue Agency’s reporting requirements for the sale of a principal residence.

When you sell your principal residence or when you are considered to have sold it, usually you do not have to report the sale on your income tax and benefit return and you do not have to pay tax on any gain from the sale. This is the case if you are eligible for the full income tax exemption (principal residence exemption) because the property was your principal residence for every year you owned it. If your home was your principal residence for only part of the time you’ve owned it, a calculation is made to determine the portion that may be allowed under the primary residence exemption and what you’ll need to pay tax on.

Starting with the 2016 tax year, generally due by late April 2017, you will be required to report basic information (date of acquisition, proceeds of disposition and description of the property) on your income tax and benefit return when you sell your principal residence to claim the full principal residence exemption.

 

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