Did you sell your home in 2016? If you did, there are some new rules that will affect you at tax time this year!
Commencing with the 2016 tax year, Canadians are now required to report on their tax return information about the sale of their principal residence. This includes any home sales that closed on or after January 1, 2016. Up to this point, reporting this information has not been a requirement for Canadians because taxpayers are not required to pay capital gains on the sale of their principal residence; the sale qualifies for the principal residence exemption when your property was your principal residence for the entire time you owned it. New regulations now require that basic information about any home sale now be reported in your income tax return, regardless of whether the sale qualifies for the principal residence exemption or not. Information required to be reported will include the date of acquisition, proceeds on disposition and a description of the property.
The intent of this new reporting requirement is to improve tax compliance and ensure that those who are supposed to be paying tax on the disposition of a property are, in fact, paying that tax. Even though it will be a bit more work at tax time, it is to the benefit of all Canadians to ensure that everyone is paying the right amount of taxes!
For more information, check out CRA’s website or click here.