Finances & Real Estate Condo Flippers - CRA wants a cut of the profits

lumix · Apr 20, 2013

If you are investing for profits, CRA wants to tax your profits

Get ready condo flippers, Canada Revenue Agency is hunting you
Garry Marr | 13/04/20 | @DustyWallet

You just sold your condo, you made a hefty profit and know you have to pay your taxes.

The bill might be more than you think.

If it’s your principal residence, there’s no tax, as long as you have the paperwork to prove it. The Canada Revenue Agency is taking a closer look at the condominium sector in what some in the industry have dubbed the “Condo Project.”

Even if you own up to it being an investment property, you may not be allowed the capital gains tax break and that means a bigger hunk of your profit going to Ottawa.

Let’s say your gain is $100,000 and your tax bracket is 46%. Capital gains are taxed at 50% so you would only owe $23,000 on that profit.

Not so fast! If the CRA says you are in the business of flipping condominiums, get ready to pay based on the gain being counted as income for a tax bill of twice the amount at $46,000. And, it gets worse. You could also face a fine of up to 50% of the tax owed for making a false disclosure.

With the deadline for filing taxes coming up April 30, you might want to think very carefully about how you record that housing sale you made in 2012

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MarkyMark · Apr 22, 2013

As they should be. Condo flippers contribute nothing but inflate the real estate bubble.

John Quezon · Jul 22, 2013

It’s nearly impossible to find knowledgeable people about this subject, but you sound like you know what you’re talking about!

tMoses Yoon · Feb 17, 2014

[email protected]

You can get unlimited advice of this nature from lawyers for dirt cheap

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Finances & Real Estate Condo Flippers - CRA wants a cut of the profits

lumix Full Member

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