CRA cracks down on real estate tax avoidance

first_img James Langton Merger of B.C. financial services, real estate regulators nears completion Keywords Tax avoidance,  Real estateCompanies Canada Revenue Agency Your wealthy clients will soon pay more for luxury vehicles Facebook LinkedIn Twitter Biden’s corporate tax plan takes aim at income inequality Downtown Vancouver, BC with bridge over harbour mfron/123RF The Canada Revenue Agency (CRA) is cracking down on tax avoidance in real estate transactions, collecting hundreds of millions of dollars in tax and tens of millions in penalties, the agency announced on Thursday.Over the past three years, CRA audits have uncovered $592.6 million in additional taxes arising from real estate transactions, the agency says in a news release. Related news CRA auditors have reviewed more than 30,000 files in Ontario and British Columbia over the past three years, generating $43.7 million in penalties, it adds.There are number of tax compliance risks in the sector, particularly in overheated markets such as Toronto and Vancouver, the agency says.“The Canadian housing market is becoming more complex through pre-construction assignment sales and the real estate sharing economy (vacation rentals) and the CRA is committed to ensuring that tax obligations are met in these cases,” it says.Some of the compliance issues flagged by the CRA include: profits generated by property flipping transactions that must be reported as business income; new home buyers adhering to housing rebate rules; and the obligation for builders of new and renovated properties to collect GST/HST when they sell, or rent, a property for the first time.“For many hard-working middle class Canadians, buying a first home represents a great accomplishment. Most taxpayers follow the rules and it is essential that those who choose to ignore the laws face the consequences. The results we announce today demonstrate our government’s commitment to taking concrete action against those who break the rules,” says Diane Lebouthillier, minister of national revenue, in a statement. Share this article and your comments with peers on social medialast_img read more