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CRA cracking down on tax cheating in real estate

The Government of Canada recognizes the importance of ensuring a healthy, competitive, and stable housing market for all Canadians, while also working to improve tax fairness. To that end, the Government of Canada has taken significant steps to address tax cheating in real estate transactions.

In recent years, the Canada Revenue Agency (CRA) has increased its real estate audits in both the Greater Vancouver and the Greater Toronto areas as increased real estate speculation was observed. In addition, starting with the 2016 tax year, the Government of Canada requires that Canadians report to the CRA the sale of any principal residence to ensure that only eligible homeowners get tax benefits.

National revenue minisiter Diane Lebouthillier explains, “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 laws.”

From April 2015 to March 2017, the CRA audits of real estate transactions resulted in more than $329.4 million in assessed income that had not been reported. During this time, the CRA applied over $17 million in penalties, primarily associated with Canada’s two major real estate markets in Toronto and Vancouver.

Canadians work hard for their money and the Government of Canada recognizes that many families count their principal residence as both their home and most valued asset.‎ The CRA will continue to strengthen relationships with key partners such as provinces, territories, and municipalities to further expand, obtain, and exchange information on real estate transactions, thereby enhancing the CRA’s ability to combat tax evasion and avoidance.

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