Photo: Evelyn Proimos/Flickr
The Taxman is coming for homebuyers in BC and Ontario.
Through a massive audit that began in 2015, the Canada Revenue Agency (CRA) says it’s uncovered more than $1 billion in outstanding real estate-related taxes.
Auditors combed through 41,700 files originating in the two provinces, identifying upwards of $100 million in assessed penalties.
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Additional gross taxes assessed climbed 65 percent in 2018 compared to the previous year, accounting for $171 million. Last year’s penalties total more than $57 million, having more than doubled annually.
Tax dodgers beware, as the federal government plans to continue its crackdown.
Justin Trudeau’s Liberal government has earmarked in its 2019 budget another $60 million to establish and operate a Real Estate Task Force targeting property markets in the Greater Toronto Area and Greater Vancouver, which have been flagged as hotbeds for money laundering.
The government expects this will encourage tax compliance, but any additional taxes recovered are going to be fed into Canadian social programs.
“The Government of Canada is committed to ensuring that Canadians benefit from a strong, stable housing sector,” says Diane Lebouthillier, national revenue minister, in a news release.
“With Budget 2019’s proposed multi-year funding for the CRA’s work on the real estate sector, we will create a new Real Estate Tax Force and increase our efforts to combat non-compliance to better ensure tax rules in the real estate sector are followed by all Canadians,” Lebouthillier continues.
In recent years, the CRA has increasingly held a microscope up to the Toronto and Vancouver property markets in particular to catch tax cheats.
Looking at real estate transactions between April 2015 and March 2017, the CRA discovered $329.4 million worth of assessed income that wasn’t reported, resulting in more than $17 million in penalties, the bulk of which were tied to Toronto and Vancouver, according to an earlier news release.
Beginning in 2016, the federal government made it mandatory for home sellers to report the sale of primary residences.