New reporting rule for principal residence

By December 28, 2016News
New reporting rule for principal residence

On October 3, 2016, the Federal Government announced an administrative change to Canada Revenue Agency’s reporting requirements for the sale of a principal residence. The changes apply to all taxpayers, including those who have always been resident in Canada.

Under the Income Tax Act of Canada, you are technically required to file Form T2091 to designate your home as a principal residence for any particular year. The form must be filed with your personal tax return for the year you sell the home. On the form, you designate which years the home was your principal residence.

Despite this rule, until now, the CRA did not require you to file the form if the entire gain from your home was exempt under the principal residence exemption. Because of this administrative policy by the CRA, most Canadians selling their homes did not file the form, and did not report the gain.

Starting with the 2016 tax year, generally due by late April 2017, you will be required to report basic information (date of acquisition, proceeds of disposition and description of the property) on your personal tax return when you sell your principal residence to claim the full principal residence exemption. If you have any questions regarding this change please feel free to contact us at info@schwancpa.ca.

Jeff Schwan

About Jeff Schwan

Jeff established Schwan & Associates CPA to bring unique “cloud-based” accounting services to small and medium-sized Edmonton businesses. Inspired by the quality time spent with his family, Jeff’s goal is to put more time back in the hands of the busy entrepreneurs who strengthen Edmonton’s business community. With 10+ years of experience in diverse management roles, Jeff has acquired a strong set of leadership and mentoring skills. He is, and always has been, an educator at heart. He knows the value of spreading knowledge, investing in people, and continually learning.

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