On October 3rd, 2016, the Canada Revenue Agency made a significant change to its reporting standards with regards to the sale of one’s principal residence. For tax reporting purposes, it is important that Canadians take the time to completely understand these changes, given that they will need to be applied in the upcoming 2016 Canadian tax year reporting. The changes made to reporting the sale of one’s principal residence will impact those who have sold their principal residence during 2016 even if the sale occurred prior to October 3rd. Leskun & Son Accounting is very knowledgeable with the new Canada Revenue Agency reporting standards and is here to help thoroughly educate individuals on the changes so that they can get the most out of their income tax reporting. Learn about what changes were made, why they were made and what these changes mean for Canadians.
What reporting changes were made?
Before the 2016 changes made to reporting the sale of one’s principal residence were implemented, homeowners in Canada did not have to report any gains made on the sale of property in which they were the principal owners. This meant that they also did not have to pay any income tax on gains from property sales. The recent changes will now require homeowners to report the sale of any principal residence occurring in 2016. This doesn’t necessarily mean that everyone will be paying taxes on sales gains. It means that all sales will have to be reported whether or not they are taxable. This reporting will need to be filed on the T1 Income tax and Benefit Return. If you are unsure of how to complete this reporting or would like to know whether or not you will be paying taxes on any property sales, contact the income tax experts at Leskun & Son Accounting.
Why were the tax reporting changes made?
The 2016 changes made to reporting the sale of one’s principal residence are intended to improve tax reporting consistencies for property sales within Canada. The general concept is to reduce overall fraud and penalize those individuals who falsely claim to be the principal residents of homes in order to partake in quick home flipping for large gains. These new standards will make it much easier for the Canadian government to implement routine audits and detect fraud which will help benefit Canadian citizens and the entire Canadian housing market.
What do these changes mean for Canadians?
The 2016 changes made to reporting the sale of one’s principal residence means that the onus is on Canadians to learn about these changes and apply them to their 2016 income tax reporting in April. The failure to properly report any sales of one’s principal residence can now result in costly penalties. If you are unsure of the implications of these new changes or how they may impact your income tax reporting, please contact the experienced tax professionals at Leskun & Son Accounting.
If you have any questions about the important 2016 changes made to reporting the sale of one’s principal residence, please contact Leskun & Son Accounting at 604-532-0061 or visit our website to request an appointment. Leskun & Son has provided clients with tax services, bookkeeping services and business consulting services within the Langley, BC for three generations. For all of your accounting and tax needs, contact the personable, professional team at Leskun & Son.