24 October 2016

New CRA Rules for Declaring Sale of Family Residence

A colleague brought this to my attention today and I thought it was worth sharing since in the context of family law and separation, the sale of the family residence is often an issue. 


CRA announced on October 3, 2016 that they had made administrative changes to the reporting requirements when it comes to sale of a principal residence.  Previously, if you sold your principal residence you did not have to report the sale on your tax return if you did not have to pay tax from the gain of the sale.  This would be the case if you were eligible for the full income tax exemption meaning that the residence was your principal residence for every year that you owned it.  Conversely, if you sold an investment property, you are required to report the sale and pay tax on the gain.  The new CRA policy says that starting in 2016, and retroactive to January 1, 2016, you are required to report the sale of your principal residence in order to claim the full exemption, and you need to provide information about when you bought it, the sale price and so on. 


More information can be found on the CRA website HERE


Karen F. Redmond

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