In October 2016, the Federal Government announced an administrative change in the requirements for the reporting of the sale of a principal residence.
The principal residence exemption is an income tax benefit that generally provides you an exemption from tax on the capital gain realized when you sell a property that is your principal residence. Generally, the exemption applies for each year the property is designated as your principal residence.
Beginning with your 2016 Tax Return, if you sold your principal residence in 2016 you will be required to declare the sale on Schedule 3, Capital Gains of the T1 Income Tax and Benefit Return. On this form, you will be required to report basic information - date of acquisition, proceeds of disposition and description of the property on your income tax and benefit return when you sell your principal residence to claim the full principal residence exemption.
Prior to this change, you were not required to report any information on the sale of a property that was your principal residence for every year that you owned it.
The CRA has stated that the change will improve compliance and administration of the tax system.
Additional information on this important change can be found at http://www.cra-arc.gc.ca/gncy/bdgt/2016/qa11-eng.html.
If you require any information pertaining to the sale of your property in 2016 that was handled by our office, please email your request to our office at email@example.com and we will be happy to assist you.