Two weeks ago, the government of British Columbia announced a new partnership with the Canada Revenue Agency (CRA) to share data of real estate transactions within the province. It is expected that the information will assist the CRA in its current investigation of possible income tax and GST evasion on new-house sales.
The Globe and Mail article states that the CRA “is auditing cases of possible GST evasion on new-house sales. It is also investigating cases of undeclared capital gains or income, many involving homeowners who evade taxes by declaring investment properties as principal residences. The sale of a principal residence is not subject to capital-gains taxation.”
With the rise in condo and house flipping in Canada, enforcement mechanisms to detect questionable tax practices have been put in place and this is just another example of that.
For taxpayers who have made a tax mistake or left out details about income on their tax return, the Voluntary Disclosure Program is a great way to avoid interest and penalties from the CRA. This program allows taxpayers the opportunity to come forward, make things right, and have peace of mind.
You can read the entire article here: http://www.theglobeandmail.com/news/british-columbia/bc-to-unveil-new-measures-to-improve-collection-of-real-estate-data/article28762976/.
If you are concerned about a CRA assessment because of unreported or misreported income tax information on your part, call Tax Solutions Canada today: 1-888-868-1400.