Canada’s Tax Authority Has Been On A Multi-Billion Dollar Real Estate Crackdown

Canadian real estate owners are stuck paying a buttload in penalties after trying to avoid taxes owed. New data from the Canada Revenue Agency (CRA) shows their crackdown on real estate owners/sellers has led to billions in recouped revenue. Data provided by the agency also shows they’ve collected substantial fines adding up to hundreds of millions, after diving into real estate transactions. The program is largely focused on Greater Toronto and Vancouver, as a high volume of red flags were being set off. 

Canada’s Tax Authority Has Been Quietly Cracking Down On Real Estate

The CRA has been on a mission to crackdown on real estate tax evasion, especially in Ontario and BC. Redflags they’re looking for include: 

Property flippers: People who regularly flip property for income without properly disclosing the funds might get a second look.  

Unreported capital gains: Sold property and didn’t declare? That’s a problem, even if taxes aren’t owed. 

Unreported worldwide income: Have cash coming in from outside of the country? If the CRA finds hints of it and you haven’t told them where it’s coming from, they might have some questions.

Unreported GST/HST on a new or substantially renovated home: Built a new home on a lot and sold it? You were supposed to collect GST/HST. Ditto in some cases where owners “substantially renovate” a property before selling it (think gutting it and leaving a shell, probably not just adding a new kitchen). 

Lifestyle Assessments: If the owner is balling in a high value home and there’s a big gap between income and the payments, the CRA might want a second look.  

There are other flags as well since the agency can correlate data, but those are the bigs ones they mentioned. 

Canadian Real Estate Audits Produced Over $299 Million In Penalties

Canadian real estate owners paid substantial penalties for non-payment of tax obligations, just in Ontario and BC. From April 2015 to March 2022, the CRA’s real estate crackdown produced $2.2 billion in audit assessments. Included in that amount was $298.9 million in penalties for non-payment. Once again, this isn’t the full extent of the program but just in two provinces. It’s also worth noting the program first began in 2015 but most of the action has been over the past few years. 

Canadian Audit Results Related To Real Estate

The Canada Revenue Agency (CRA) results of audit activities related to real estate in Ontario and BC from April 2015 to March 2022, and the source program for the assessment. The amounts include assessed penalties.

Source: CRA; Better Dwelling.

The audit assessment values are split into three major categories: Income tax, GST/HST, and GST/HST New Housing and new residential property rebates. Ontario and BC both showed about $1.1 billion in audit assessments respectively, but for very different reasons. 

Canadian Audit Penalties Resulting From Audits Related To Real Estate In Ontario and BC

The Canada Revenue Agency (CRA) penalties resulting from the audit of activities related to real estate in Ontario and BC from April 2015 to March 2022.

Source: CRA; Better Dwelling.

Ontario’s audit assessment included $147.6 million of income tax, and another $332.2 million GST/HST. Most of the value was in GST/HST New Housing and new residential property rebates, coming in at $662.9 million for the period. 

Over in British Columbia the audit assessment was made up of GST/HST ($266.7 million) and GST/HST New Housing and new residential property rebates ($26.2 million). The lion’s share was income tax though, which represented a whopping $844.6 million of the assessment.

Canadian Audit Results Related To Real Estate

The Canada Revenue Agency (CRA) results of audit activities related to real estate in Ontario and BC from April 2015 to March 2022, and the source program for the assessment. The amounts include assessed penalties.

Source: CRA; Better Dwelling.

That’s just two provinces, but the tax authority says they primarily focus on Greater Toronto and Greater Vancouver. Pricey real estate combined with high transactional value, and aspiring investors that might not know the rules are concentrated in these regions. The recent real estate boom and our recent dive into property registry data shows a huge investment surge across the country, perhaps resulting in wider crack downs. 



We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • Trader Jim 2 years ago

    The mystery of BC’s lowest-income-and-highest-home-prices is getting solved. Well look at that.

  • Gerald Haw 2 years ago

    Cash grab from the government to pay for their spending. Spending like a drunken sailor is going to be justified as not enough revenue. Just like giving speculators cheap money to buy houses wasn’t the problem, not having enough houses for speculators is the real problem.

    • KMP 2 years ago

      How is it a cash grab?? These are tax cheats that owe this money to the government….and the government is you and I. Why should I subsidize a bunch of cheats that don’t pay their fair share??? If we crush the speculators, (or speculords…I love that term coined by BD), we crush a good part of the problem!

    • Mark O'Neill 2 years ago

      So you’re saying it’s OK for people to defraud their fellow taxpayers? Good to know.

    • CD 2 years ago

      How is it a cash grab when CRA goes after tax evaders?

    • Kevin Sequeira 2 years ago

      Bahaha say you work for the real estate industry without actually saying you work for the real estate industry. Oh wait, too late.

  • Erik 2 years ago

    If the CRA paid me 100k, I could find 20 million + of mortgage fraud in Chilliwack, BC. Primary residence exemption is being abused big time. Under the table rent is being abused big time.

  • Ron Bruce 2 years ago

    If the CRA has been looking the other way, what is FINTRAC hiding?

  • Justin Case 2 years ago

    Better late than never.

  • SRP 2 years ago

    All small action make difference….. some people owning multiple homes with million dollars value & they are still eligible for all government benefits like child benefit, gst

  • Balter 2 years ago

    Well worth a look – like broken window theory, some of these will lead to human trafficking and money laundering – although probably not the ones well versed enough to hire sharp lawyers… and former CRA adjusters too: if the racket can offer 10x your wages as an investigator, it will. Some will take it (especially if the alternative is worrying about injury and extortion)

  • Ann Marie Gallinger 2 years ago

    Hi , I have a question to ask. My sister left me her house in her will and the lawyer told her it would be better if she just added my name on the deed to the property, that way I would not have to pay inheritance tax. Well my sister got sick and we lived in the country and she could no longer drive , plus I have catteracts and cannot see to drive either. So my sister sold her house. Now She has bought another house with her money from selling the first house . None of this money was mine I am on CPP and I receive GIS will I be affected by any of this . I am not to receive a dime until her death but the house was paid out in 2 names .What can I do about this I can not lose my pensions over this since I didn’t get one dime of the money . Please tell me what to do . Thank-you

  • Dave Ball 2 years ago

    These taxes are some of the reasons we have declined to rent a portion of our house. Others reasons include: Insurance cost would increase. Any income would be taxed at our nominal rate. And we would lose some of the CGE. Add in crazy rental laws like not being able to end a tenancy, penalties if you do for family reasons and no fixed term rentals. All this to earn a few hundred dollars a month while giving up personal space and dealing with the cost, wear and tear and hassles of renters. This illustrates the problem with housing in Canada. There are too many dogs trying to feed off the carcass of beleaguered homeowners. From bankers to insurers to multiple taxation authorities, they make doing business as a small holdings landlord a wasted effort. Renters suffer as a result with fewer choices and higher prices.

  • Captain Awesome 2 years ago

    No, no!! This time is different! Prices can only go up!!! Now is the best time to buy!!! 😃

Comments are closed.