Does the CRA Find Out When You Sell Property in Ontario?
You should assume a property sale leaves a paper trail. A sale is completed by registering a transfer of title, and generally that transfer must be signed for completeness by two different lawyers, one acting for the seller and one for the buyer. Some transfers, such as those within a family or between related parties, may be completed by one lawyer acting for both sides. Land transfer tax is payable when the transfer is registered, which happens on closing.
Whether and how a sale appears on your tax return depends on the property and how you used it. Those details are best confirmed with an accountant before you file.
The CRA also matters if tax is already owing. It can certify unpaid tax as a debt, register the certificate in the Federal Court, and then record a memorial in a provincial land registry to create a charge on your property. That charge ranks behind any charge, lien or interest perfected before the memorial was recorded. Property cannot be sold under these enforcement proceedings without the Minister's written consent.
Key takeaways
- Most transfers of title must be signed for completeness by two different lawyers, one for the transferor and one for the transferee.
- Ontario land transfer tax is payable when the transfer is registered, which happens on closing.
- What you report on your tax return depends on the property and how you used it, so confirm it with an accountant before you file.
- If tax is owing, the Minister may certify it as a debt and register the certificate in the Federal Court, and a memorial may then be recorded in a provincial land registry to create a charge on your property.