19 September 2016 ~ 0 Comments

CRA On The Hunt For Real Estate Tax Cheats

This past week I attended a presentation that covered tax implications when doing assignment sales, buying fixing, and flipping property and selling pre-construction condos.

Often we hear of friends or family who have made money in some form of one of the above scenarios, but we don’t talk much about the tax implications that are triggered when doing so.

Canada Revenue Agency has a new state-of-the-art computer system that is designed to review every sale of residential property. This to me is not shocking to say the least, as I would expect our government to use modern tools and techniques to recover the taxes owing when investment or speculative sales occur, of any nature.

What did make me sit straight up in my seat were the underhanded ploys, dishonest goading and straight up trickery to get what I suspect are mostly honest but ill-informed taxpayers to part with substantial sums of money.

The CRA seems to use tactics that resemble some of society’s worst case stereotypes when it comes to scamming people out of money. I understand this tactic when used on someone who clearly is trying to cheat the government out of paying tax. But to be a blanket approach strategy that is meant to fling poop against the wall and see what sticks, seems fairly shady to me.

I always advise my clients whenever they have questions or need tax advice to consult the appropriate professionals for expert guidance. There is the potential to make amazing gains in buying and selling investment real estate. You should certainly always factor in the tax payable before you sell and even often before you buy!

If you have any questions around this matter feel free to reach out me and I will gladly share my resources, or contact your tax advisor or related professional.

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