Report your real estate income
Find out what your real estate tax obligations are
If you sell or rent property, you have an obligation to report the sale and all the income you earn from your real estate transactions. Familiarize yourself with your tax obligations to make sure you follow all relevant tax laws. That way, you won’t end up missing out on deductions, or paying penalty and interest charges in addition to any taxes owed.
Reporting property sales
If you sell a property – even if it’s your principal residence – you must report the sale on your tax return when you file. How you report depends on what type of property you sell.
Selling your principal residence
If you sell your home, you are generally eligible to claim the principal residence exemption, which means you won’t owe taxes on the profit from the sale. Learn more about selling your principal residence and how to report.
Selling a property other than your principal residence
If you sell a property other than your principal residence for more than you paid for it, you may have a capital gain or it may be considered business income. Similarly, if you sold the property for less than you paid, you may have a capital loss or business loss. In all cases, you must report this information on your income tax return. A secondary property may include a rental property or a recreational/vacation/seasonal property.
If you buy a property with the intention of re-selling it at a profit, your profit from the sale is fully taxable. This could include a property you bought, renovated and then re-sold (flipping). This could also include a property that you bought before it was built and then re-sold before building was complete (sometimes called an assignment sale). Find out about the tax effects of buying real estate to sell for a profit.
Buying from a non-resident
If you buy property in Canada from a non-resident, you could be liable for paying the taxes on the profits earned by the seller. Protect yourself and ask your real estate lawyer if you need a certificate of compliance before any money exchanges hands. More information is available on buying from a non-resident.
Reporting your rental income
When you rent out property, there are tax implications related to the income you collect and the expenses you incur. Find out how to report your rental income.
- How the Canada Revenue Agency addresses non-compliance in the real estate sector
- What are your federal tax obligations when buying and selling property in Canada?
- Unnamed persons requirements in real estate
- Real estate audit results
Forms and publications
- GI-120 Assignment of a Purchase and Sale Agreement for a New House or Condominium Unit
- Form T2091(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust)
- Form T2091(IND)-WS, Principal Residence Worksheet
- Income Tax Folio S1-F3-C2, Principal Residence
- T4037 Capital Gains 2017
Report a problem or mistake on this page
- Date modified: