It’s an exciting time – the old house is sold, the new one is ready, and all that’s left is the move…..oh wait – not quite yet! There’s all that legal “stuff” to deal with now….signatures….titles to be given…and pages and pages of documents that need to be signed before the key is in your hand!!! And to top it all off – who really knows a good real estate lawyer?
The Trusted Regina team is proud to bring you a partner that can help! Welcome Robert MacKay, Regina’s #1 Home Lawyer to Regina’s directory of excellence!
In this article Robert explains why you have to report the sale of you principle residence to CRA.
Reporting the sale of a principal residence was unnecessary before 2016, the year the federal government announced a series of steps designed to slow the housing market down and close housing-related tax loopholes. Some people used the previous lack of scrutiny of gains from the sale of a home to their advantage, including investors flipping homes, and others who owned both a cottage and a house and weren’t conscientious about declaring which was a principal residence.
CRA says that if you forget to report the sale of a principal residence, you’ll need to amend your tax return for that year as soon as possible. Late reporting may be accepted in some cases, but it’s possible you’ll have to pay a penalty equal to the lesser of $8,000 or $100 for each complete month you’re late in reporting.
In most cases, you won't pay tax on the money you make from selling your home if it was your principal residence every year since you bought it.
If you sold property in 2017 or after that was, at any time, your principal residence
, you must report the sale on Schedule 3, Capital Gains (or Losses)
corresponding with the tax year and Form T2091
(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust).
According to CRA here is why you must report the sale.
For the sale of a principal residence in 2016 and subsequent years, we will only allow the principal residence exemption if you report the disposition and designation of your principal residence on your income tax return. If you forget to make this designation in the year of the disposition, it is very important to ask us to amend your income tax return for that year. Under proposed changes, we will be able to accept a late designation in certain circumstances, but a penalty may apply.
For more information check out this article from Tim Cestnick
with the Globe and Mail
Once you have committed to either buying or selling your property, simply tell your realtor and lender, as applicable, that Robert MacKay will be representing you and to forward the appropriate instructions to MacKay & McLean, attention "Robert MacKay".
Robert MacKay is your Trusted Regina Real Estate Lawyer