5/31/2019
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Posted in Mortgages and Real Estate by Vanguard Realty | Back to Main Blog Page
The Canada Revenue Agency has identified over a $1 billion in unpaid gross taxes in the real estate sector since 2015 and has doled out over $100 million in penalties.
“Last year, the CRA assessed $171m more in additional gross taxes related to real estate than in the year prior, a 65% increase,” read a news release. “Penalties also totaled over $57m, which is more than double compared to the year prior.”
The federal budget included more money for the CRA to enforce compliance. The agency will receive $50m over five years and $10m ongoing to create the Real Estate Task Force, which will begin its focus on the Greater Toronto and Vancouver areas. The hope is that it will deter non-compliance in Canada’s two most expensive real estate markets.
The move has been welcomed by the Toronto Real Estate Board, which noted that while Toronto and Vancouver could be problem areas, tax evasion is a nation-wide problem.
“The Canada Revenue Agency should be enforcing the law not just in the Greater Toronto Area and Vancouver, but across the country in all markets,” said Von Palmer, TREB’s chief government and communications officer. “Taxpayers should be complying with the law and report all sales of their principal residence on their tax returns and any capital gain from property sales where the principal residence tax exemption doesn’t apply. This should not be viewed as a GTA or Ontario or British Columbia issue. There’s no excuse for tax non-compliance and hopefully these CRA audits will deter non-compliance.”
For the last few years, the CRA has been working closely with B.C. and Ontario to tackle tax evasion in real estate, and it’s resulted in information collection and exchange, as well as improved reporting—which the CRA credits with improved audits.
“The Government of Canada is committed to ensuring that Canadians benefit from a strong, stable housing sector,” The Honourable Diane Lebouthillier, Minister of National Revenue, said in a statement. “With Budget 2019’s proposed multi-year funding for the CRA’s work on the real estate sector, we will create a new Real Estate Tax Force and increase our efforts to combat non-compliance to better ensure tax rules in the real estate sector are followed by all Canadians.”
CRA, Real Estate Tax Evasion, Taxes
