Canada Revenue Agency will be taking a closer look at Real Estate transaction
CRA to conduct cross-border investigation on real estate tax evasion
Ephraim Vecina
Mortgage Broker News
The Canada Revenue Agency has announced that it will be taking a closer look at real estate transactions in the United States to search for Canadians with hidden income.
In its cross-border investigations, the CRA will be studying transactions spanning from 2014 to 2020, with particular focus on owner names, municipal addresses and assessments, sales histories, and property land/floor areas, among others.
“This information will enhance the Agency’s ability to administer tax programs and to enhance the various tax Acts in order to protect Canada’s revenue base and to support the Agency’s business and research processes,” the CRA said in a notice. “The agency requires US real estate and real property data where a Canadian resident is the owner or party to the purchase, sale or transfer.”
In 2016, the agency instituted a fine of up to $8,000 for an owner failing to report the sale of their primary residence, although the sale itself is non-taxable.
The policy was intended to establish paper trails for taxable transactions such as sales of investment and recreational properties, according to Blacklock’s Reporter.
“In recent years, the agency has increasingly been identifying cases where taxpayers did not report their income from real estate transactions,” the CRA said last year. “The penalties and interest associated with unreported real estate sales can be substantial.”
Last year, the CRA estimated that the amount lost due to unpaid gross real estate taxes since 2015 was more than $1 billion.
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