Reporting Your 2022 Primary Residence Sale To CRA
If you sold your primary residence last year, you must report it when you file your income tax. Don't worry, YOU ARE EXEMPT from paying any capital gains on your profit, but CRA has been hunkering down since 2016 to monitor the number of sales a person is doing. You will need to fill out the first part of the T2091 form.
- year purchased
- brief description
- the selling price for 2022
WHAT IS A PRIMARY RESIDENCE?
This dwelling could be a house, condo, apartment, duplex, rowhouse, cottage, or acreage. CRA's definition is not super clear, but you will have to prove that you regularly inhabit this residence most of the time. So even if you are selling a home that you partially rent out or it's a secondary home outside of the country, you still may be eligible to claim the Principal Residential Exemption (PRE). Check with your accountant or tax professional for more clarity on your particular sale. Generally, it's best to designate the property with the highest average gain/year if possible. You can also only designate one principal residence a year. Acreages and farms also fall into a tricky area, where only 1/2 a hectare of land plus the home is exempt, while the remaining land is subject to the capital gains tax.
WHAT HAPPENS IF YOU DON'T REPORT?
If you get audited, you could face penalties of $100/every month for late reporting up to a maximum of $8,000.
Unsure of where your sale fits? We suggest connecting with your accountant, tax professional or visiting CRA's website for all the details.
Post a Comment