Sold your home in 2016? Tell the government or it will cost you.
It is that dreaded time of year, tax season. Normally we would not comment on such topics but this year, the new
tax rules do affect our client base if you sold your home in 2016. So, today we will leave low mortgage rates and hot Hamilton market prices on the shelf. At Robert Floris’ Mortgage Architects office in Hamilton we will review the new rule and give it our own analysis.
WHAT IS THE NEW TAX RULE?
Starting in 2016, you have to report your sale of your home on your income tax return.
Really nothing, if the home was your principal residence. If the government deems the sale speculation or a non-principal residence, they will charge a capital gain tax.
REPERCUSSIONS IF YOU DO NOT REPORT?
It could mean a penalty of $100 per month up to $8000 if the home is deemed a non-principal residential property. If charged and your home is a principal home, you can have your taxes re-evaluated by Revenue Canada.
Although the government may say all the right things such as this is a great tax to keep an eye on speculations, foreign investors and house flippers to control home prices. To me, it is another way the government can collect taxes by telling us it is good for us.
Robert Floris is an independent mortgage agent with Mortgage Architects.