Wednesday, October 25, 2017 / by Sonny Bhinder
CRA Analyzing 2,810 Transactions Of Pre-construction Condominium Flipping In Toronto
The Canada Revenue Agency is analyzing 2,810 pre-construction condominium transactions in Toronto, to determine whether audits need to be carried out to find tax evaders.
The Federal Government Agency said Tuesday, audit work has substantially increased in the Toronto area on what is called "Assignment Sales " or " Shadow Flipping" in which a condo is purchased from a developer and sold to another buyer before the unit is completed.
CRA spokesman Zoltan Csepregi said in an emailed statement, "The profits from flipping real estate are generally considered to be fully taxable as business income, and the facts of each case determine whether such profits should be reported as business income or as a capital gain"
The Agency said real estate deals in Greater Toronto Area and Vancouver have been the subject of greater scrutiny, including audits.
"New technologies and faster computers are helping us to more effectively access, integrate, and analyze this data, resulting in better business intelligence"
Tsur Somerville, a senior fellow at the UBC Centreof Urban Economics and Real Estate says " The CRA's interest in tax avoidance in real estate is likely related to the affordability issues in Toronto and Vancouver over the last couple of years"
According to the numbers released by the Toronto Real Estate Board earlier this week, The average selling price of a condo in the Toronto area in the third quarter of this year rose 22.7 % to $510,206 from $415,894 in the same quarter last year.
Meanwhile, according to the Real Estate Board of Greater Vancouver the benchmark price for an apartment in Greater Vancouver last month was $635,800, up 21.7% from September 2016.
As all levels of Government face pressure to help housing affordability, Somerville said going after potential tax evaders is a political win.
The Federal Government Agency said Tuesday, audit work has substantially increased in the Toronto area on what is called "Assignment Sales " or " Shadow Flipping" in which a condo is purchased from a developer and sold to another buyer before the unit is completed.
CRA spokesman Zoltan Csepregi said in an emailed statement, "The profits from flipping real estate are generally considered to be fully taxable as business income, and the facts of each case determine whether such profits should be reported as business income or as a capital gain"
The Agency said real estate deals in Greater Toronto Area and Vancouver have been the subject of greater scrutiny, including audits.
"New technologies and faster computers are helping us to more effectively access, integrate, and analyze this data, resulting in better business intelligence"
Tsur Somerville, a senior fellow at the UBC Centre
According to the numbers released by the Toronto Real Estate Board earlier this week, The average selling price of a condo in the Toronto area in the third quarter of this year rose 22.7 % to $510,206 from $415,894 in the same quarter last year.
Meanwhile, according to the Real Estate Board of Greater Vancouver the benchmark price for an apartment in Greater Vancouver last month was $635,800, up 21.7% from September 2016.
As all levels of Government face pressure to help housing affordability, Somerville said going after potential tax evaders is a political win.
