Reporting the Sale of Your Principal Residence for Individuals (other than trusts)

On October 3, 2016, the Government announced a change to Canada Revenue Agency's reporting requirements for the sale of a principal residence.

When you sell your principal residence, usually you do not have to report the sale on your income tax and benefit return and you do not have to pay tax on any gain from the sale.

Family in front of house with children

Starting with the 2016 tax year, due by April 2017, you will be required to report basic information (date of acquisition, proceeds of disposition and description of the property) on the sale on Schedule 3, Capital Gains of the T1 Income Tax and Benefit Return when you sell your principal residence to claim the full principal residence exemption. Reporting will be required for sales that occur on or after January 1, 2016.

You must complete Schedule 3 and file it with your T1 Income Tax and Benefit Return for the year you sell the property.

What happens when you don’t claim it?

The penalty is the lesser of the following amounts:

  1. $8,000; or
  2. $100 for each complete month from the original due date to the date your request was made in a form satisfactory to the CRA.

In the meantime, more information on the current administrative practice, legislative requirements and related information is available on the following CRA Webpages:

Principal residence and other real estate

Income Tax Folio S1-F3-C2, Principal Residence

How does the Canada Revenue Agency address non-compliance in the real estate sector?

T4037, Capital Gains

When someone has died / Deemed disposition of property