VANCOUVER—In Vancouver and Toronto’s hot real estate markets, property owners “try to trick the Canada Revenue Agency” all the time, but over the past two years Canada’s taxation authority has become more aggressive at rooting out tax evasion, says a tax and estate planner.
“People are in some cases lured by the prospect of making easy, quick money,” said Jamie Golombek, managing director of tax and estate planning at CIBC in Toronto. “The temptation is not to report or to inappropriately report.”
The agency says transactions in the Greater Toronto Area have been under “greater scrutiny ... for some years,” but has only recently “been actively monitoring and auditing real estate transactions in British Columbia.”
There’s a marked difference between the type of tax evasion the CRA found in Ontario versus British Columbia. In B.C., 45 per cent of the unpaid taxes came from not properly reporting income, while in Ontario, the majority of the unpaid tax – 90 per cent – came from not paying GST on new buildings or improperly applying for a GST rebate.