In recent years, the federal government has provided Canadians with access to significant rebates in relation to real estate. Rebates for energy-efficiency upgrades, for building a new home, even for home renovations, are available for residents looking to recoup some of their costs. However, some of these are also becoming well-known audit triggers, in particular the new housing rebate and the new residential rental property rebate.
The new housing rebate allows an individual to recover some of the GST or the federal part of the HST paid for a new or substantially renovated house, whereas the new residential rental property rebate allows landlords to claim a portion of the GST/HST on the purchase of a rental property.
Back in October, CBC News reported that the CRA had recovered more than $240 million from audits related to investigations of tax cheating on real estate in B.C. and Ontario, the bulk of the funds coming from Ontario. There, the federal department had “recovered $210.4 million through more the 13,400 audits conducted between April 2015 and September 2016.”
Most of those Ontario audits were related to the new housing rebate and the new residential rental property rebate. These investigative audits resulted in $143.9 million recovered.
You can find the full article here: http://www.cbc.ca/news/business/cra-audits-real-estate-1.3813584.
If your new housing rebate or new residential rental property rebate claims are accurate, and can be backed up by documentation, you don’t really have much to worry about. However, if you can’t provide documentation for all claims, or if you fudged some of those claims, you may just have a problem.
At Tax Solutions Canada we can help you best meet an audit head-on – or discuss your options to amend incorrect filings through the Voluntary Disclosures Program. Don’t wait – the CRA won’t. Call us today at 1-888-868-1400.