In a similar fashion to other capital gains transactions, the proposed legislation indicates that you will have to report the following information on your tax return:
- Date of acquisition
- Cost base
- Proceeds of disposition
- Description of the property
Then, you will make an election on your tax return to 'exempt' the gain, if the property qualifies as your principal residence. To qualify, it must meet ALL of the following criteria:
It is a housing unit, a leasehold interest in a housing unit, or a share of the capital stock of a cooperative housing corporation you acquire only to get the right to inhabit a housing unit
owned by that corporation.
You own the property alone or jointly with another person.
You, your current or former spouse or common-law partner, or any of your children lived in it at some time during the year.
You designate the property as your principal residence.
If you fail to report the disposition of your principal residence, you could be subject to a fine of up to $ 8,000.
And, CRA has decided that they will now be given the authority to assess taxpayers beyond the current limit of 3 years to ensure that proper reporting did in fact take place.
Interest and penalties due to improper reporting can cost you thousands - so please contact us if you need help with this election on your personal tax return.
For further information, please follow this link: