Canada’s taxman becoming more aggressive with real estate tax evasion in hot Vancouver and Toronto markets

Posted by Michael La Prairie on Thursday, May 31st, 2018 at 11:30am.

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.”

Canada’s taxman becoming more aggressive with real estate tax evasion in hot Vancouver and Toronto markets

The CRA recently reported it had identified nearly $600 million in unpaid taxes from the British Columbia and Ontario real estate sector from audits conducted over the past three years. The agency warned that there continues to be “compliance risks,” especially in Vancouver and Toronto.

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.


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