You Might Owe CRA Answers — Do You Have to Report the Sale of Your Home in Georgetown, ON?

Do I have to report the sale of my home to CRA?

“Do I have to report the sale of my home to CRA?” — Don’t guess. Read this and act.

Quick answer — and why it matters

Yes. In almost all cases you must report the sale of your home to the Canada Revenue Agency (CRA) on your income tax return for the year of the sale. If your home qualifies as your principal residence, you can claim the Principal Residence Exemption (PRE) to eliminate or reduce capital gains. But you still must report the sale and designate the years the property was your principal residence. Missing this step costs you time, cash, and flexibility.

This article gives clear, local, action-first advice for home sellers in Georgetown, Ontario — what to file, when to file, what to keep, and the special issues that trip up Halton Hills sellers.

Why Georgetown sellers must care

Georgetown sits inside Halton Hills and the GTA West market. Prices here and closing timelines move fast. That speed means mistakes happen: missed forms, late applications, or not applying for clearance when you’re a non-resident. Those mistakes turn a clean sale into a tax problem. Be proactive. Protect your proceeds.

The forms you need and how to use them

• Schedule 3 (Capital Gains) — report the disposition in the year of sale. Even if the gain is $0 after claiming PRE, the sale must appear on Schedule 3.
• Form T2091(IND) — use this to designate the property as your principal residence for the years you owned it and to calculate any gain eligible for PRE.
• Form T2062 or Section 116 clearance (for non-residents) — if you’re a non-resident at the time of sale, special withholding and clearance rules apply. See the non-resident section below.

If you had a partial change of use (for example, you rented a basement suite or used part of the home for business), you may also need to report a deemed disposition and complete additional calculations.

What counts as proceeds and how to calculate capital gain

Capital gain = proceeds of disposition minus adjusted cost base (ACB) minus selling costs.

• Proceeds: sale price on the closing statement (use net proceeds after paying commissions and legal fees when calculating actual taxable gain).
• Adjusted Cost Base: original purchase price + cost of capital improvements (think major renovations, not paint) + legal and transfer costs when you bought the property.
• Selling costs: realtor commissions, legal fees, and marketing costs reduce the gain.

CRA includes 50% of a capital gain in income. If PRE applies for all years, taxable capital gain = $0.

Common scenarios for Georgetown sellers — what to watch for

1. Selling your family home (you lived there full-time) — likely exempt

• You still must report and designate the years you lived there on T2091(IND) and Schedule 3.

1. You rented the house or part of it before selling — possible partial tax

• If you converted the house to rental use, CRA may treat it as a change of use and a deemed disposition at fair market value at that date. You may get a partial PRE or owe capital gains tax on the rental portion.

1. Home used for business (home office or day care) — limited PRE available

• The portion used for business may trigger a partial taxable event. Keep records of the percentage used and the dates.

1. You moved out and left it vacant while listing — usually still eligible for PRE, but document dates of residence.

2. Non-resident sellers — special rules and urgent steps

• Buyers are required to withhold 25% of the sale price and remit it to CRA unless a Certificate of Compliance (Section 116) is obtained from CRA before or at closing. Apply for the certificate early: CRA processing can take weeks to months. If you don’t get clearance, the purchaser will hold back funds and your closing proceeds will drop.

1. Multiple properties or cottage in Halton Hills — designate only one property per family per year for PRE

• If you and your spouse own multiple properties, you can designate only one as a principal residence for the same years. Choose strategically.

Deadlines and penalties — don’t miss these

• File the sale on your tax return for the year the sale happened. If you sold in 2025, report it on your 2025 T1 return filed in 2026.
• If you failed to report a disposition and claimed PRE incorrectly, CRA can charge a penalty — currently up to the lesser of $8,000 or 10% of the capital gain.
• Non-residents: apply for a Certificate of Compliance as early as possible. If you close without it, expect a 25% holdback and a lengthy process for release.

Record keeping — keep these documents for at least six years

• Purchase agreement and closing statement from when you bought the home.
• Receipts and invoices for renovations and capital improvements (roof replacement, major kitchen renovation, structural work).
• Listing agreement, MLS printouts, and sale closing statement.
• Records of rental income and business use if applicable.

Keeping accurate records protects you if CRA asks for proof of PRE or ACB calculations.

Practical, step-by-step checklist for Georgetown sellers

1. Before listing: gather closing statement from purchase, receipts for renovations, and past tax returns.
2. If non-resident or thinking of moving abroad: contact a tax pro and apply for Section 116 clearance early.
3. At closing: get a final closing statement showing net proceeds and selling costs.
4. After closing (tax year of sale): complete Schedule 3 and T2091(IND) and file with your T1 for that year.
5. If unsure or complex (rental periods, business use), hire a local tax accountant with real estate experience.

Local market insight — how taxes affect pricing and timing in Georgetown

Georgetown sellers often price competitively to move quickly. But smart sellers factor tax consequences into net proceeds. If you converted a property to a rental during the market run-up in Halton Hills, expect a partial tax bill that should be factored into your listing price. Buyers may be wary of being the payer of withheld amounts for non-resident sellers, which can slow offers. Plan these tax moves with your agent and tax pro.

Why use a local realtor and tax advisor together

Selling real estate in Georgetown means juggling local market timing, negotiation, legal closing dates, and tax compliance. A realtor alone won’t file forms for CRA. A tax professional won’t stage the house or select comparable properties. Coordinate both. I help sellers connect with trusted local accountants who know Halton Hills and CRA practice.

Closing argument — act now, avoid surprises

Reporting the sale to CRA is not optional in practice. The PRE is powerful, but it must be claimed and reported properly. One missed form or late Section 116 clearance can cost thousands and delay or reduce your proceeds.

If you want a quick review of your sale paperwork, I can point you to a tax pro in Georgetown or review basic sale inputs free. Don’t wait until closing.

Contact: Tony Sousa, Local Realtor — tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca

FAQ — Clear answers for Georgetown home sellers

Q: Do I always have to report the sale of my home to CRA?
A: Yes. You must report the disposition on your T1 for the year of sale. If the property qualifies for the Principal Residence Exemption, you still must report and designate it.

Q: What if I lived in the house only part of the time?
A: You may qualify for a partial PRE. You’ll need to calculate the portion of years it was your principal residence versus years it produced income.

Q: If I converted my house to a rental, when is it taxable?
A: A change of use can trigger a deemed disposition at fair market value at the time of change. You can elect to defer by filing an election, but professional advice is essential.

Q: I’m moving abroad — do I need to report differently?
A: If you’re a non-resident at the time of sale, the buyer must withhold 25% of the sale price unless you obtain a Certificate of Compliance from CRA. Apply early.

Q: What documents do I need to prove PRE?
A: Purchase records, receipts for capital improvements, closing statements, utilities or driver’s licence showing residency dates can all help.

Q: What penalties exist for not reporting?
A: CRA can levy a penalty for failing to report a principal residence disposition — up to the lesser of $8,000 or 10% of the capital gain. You may also lose the exemption for the years in question.

Q: Is GST/HST charged on resale homes in Georgetown?
A: Generally no. GST/HST applies to newly constructed homes or significant conversions. Most resale homes are exempt from HST.

Q: How long should I keep records?
A: Keep records for at least six years after the tax year to which they relate.

Q: Who can help me prepare the forms?
A: A chartered professional accountant or tax lawyer with real estate experience. If you need a referral in Georgetown, contact Tony Sousa at tony@sousasells.ca or 416-477-2620.

If you want a fast check of whether your sale will trigger tax, send a copy of your closing statement and brief history of occupancy to tony@sousasells.ca. I’ll tell you what to ask your accountant.