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Requirement to Report Disposition of Principal Residence

For the first time Canadian taxpayers are required to report dispositions of their principal residence, even though no taxes are payable. The new rules apply for dispositions after January 1, 2016 so will have to be reported on 2016 T1s. Although there is no financial penalty for not reporting the house sale, by not reporting the Canada Revenue Agency will not be subject to the normal three-year limitation period for reassessing the tax return in the year of disposition. The reassessment period will be extended indefinitely, regardless of whether the taxpayer’s failure to report the sale was innocent or not.

Disclaimer:

"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."

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