If you sell your home, there is new income tax reporting to consider.
Under current income tax rules, when you sell your home for a profit there is no income tax and there is nothing reported in your income tax return for the year of sale assuming your home qualifies as a principal residence.
Beginning with the 2016 tax year under new proposed income tax measures, the Canada Revenue Agency will require a taxpayer to report the disposition of property that qualifies for the principal residence exemption.
The year of acquisition, proceeds of disposition and the description of the property are the information that will have to be reported. We will need this information in order to prepare your income tax return.
Further information can be found on the Canada Revenue Agency website as follows.
Other changes have been made to the principal residence exemption that would impact non-residents and trusts, however in general terms the good news is that in a situation where an individual (or couple) who were at all times resident in Canada own one or more residences there has been no additional income tax levied.
Where an individual (or a couple) owns more than one residence, such as a city home and a cottage, income tax continues to apply on any gain realized on the disposition of a property not designated as a principal residence. An individual (or a couple) can only designate one residence as their principal residence.
Should you have questions do not hesitate to contact you trusted advisor at Graham Scott Enns.