Real estate

Real estate includes the following:

• vacant land
• rental property (both land and buildings)
• farm property, including both land and buildings (other than qualified farm or fishing property)
• commercial and industrial land and buildings

For each real property you sold in 2023 that includes land and a building, you must:

• determine how much of the selling price relates to the land and how much is for the building
• report the sale of your land and building separately on Schedule 3

To help you understand how to report a disposition of real property that includes land and a building, see this example.

If you dispose of a building and end up with a loss, special rules may apply. Under these rules, you may have to consider your proceeds of disposition as an amount other than the actual proceeds. For more information, see Selling a building.

Special rules may also apply if you dispose of, or are considered to have disposed of, a property that was your principal residence for 1994 and for which you or your spouse or common-law partner has filed Form T664 or T664 (Seniors), Election to Report a Capital Gain on Property Owned at the End of February 22, 1994. If this is your situation, see Disposing of your principal residence.

The CRA may reassess an income tax and benefit return beyond the normal reassessment period in the following situations:

• you do not report in your income tax and benefit return a sale or other disposition of real estate in the year
• you do not file an income tax and benefit return for the year in which a disposition of the real or immovable property occurs and the CRA issues an assessment of tax
• you owned property directly or indirectly through a partnership and the partnership did not report the sale or other disposition on Form T5013, Statement of Partnership Income, if it was required to file one

Under this extended reassessment period, the reassessment is limited to amounts reasonably relating to the unreported or previously unreported disposition of real estate. Where the disposition is by a corporation or partnership, the extended reassessment period applies only if the property is a capital property of the corporation or the partnership.

Completing your Schedule 3

Report dispositions on lines 13599 and 13800 of Schedule 3.

Forms and publications

• Schedule 3, Capital gains (or losses)
• Guide T4037, Capital Gains