Do I have to report the sale of my home to CRA?
You sold your Milton home — do you have to tell the CRA? Read this first.
Quick, blunt answer
Yes — in almost every case you need to report the sale of your home to the Canada Revenue Agency (CRA). Even if you pay no tax because the property qualifies as your principal residence, the CRA now requires you to report the disposition and claim the principal residence exemption on your tax return for the year you sold.
This matters. Not reporting can trigger reassessments, interest, penalties, and complications if you sell another property later. If you live in Milton, Ontario, and you sold a house, condo, or income-producing property, here’s exactly what to do, step-by-step, with local tips that save time and prevent tax surprises.
Why the CRA insists on reporting — short and practical
In 2016 the CRA tightened rules. Their goal: better data and less tax avoidance. The result: whether your sale is taxable or not, you must report the transaction on your T1 tax return for the year of sale and, if applicable, claim the principal residence exemption (PRE).
For Milton sellers this means:
- If you lived in the property as your principal residence every year you owned it, report the sale and claim the PRE — you likely pay no capital gains tax. Still report it.
- If part of the property was rented or used for business, or it wasn’t your principal residence for all years, you must calculate a partial capital gain and report it.
- If you sold a new build, substantially renovated home, or flipped houses, GST/HST and different rules can apply.
The simplest checklist for Milton home sellers (do these now)
- Keep your closing documents and settlement statement (the deed, statement of adjustments, purchase and sale contracts).
- Determine use: principal residence, rental, cottage, or business.
- Calculate proceeds of disposition (sale price minus selling costs like realtor commissions and legal fees).
- Determine adjusted cost base (ACB): original purchase price plus major capital improvements, less any CCA claimed if used for income.
- Fill Schedule 3 (Capital Gains) on your T1 for the year of sale, and complete the Principal Residence Designation on your tax return if claiming PRE. Use Form T2091(IND) when needed.
- Keep records for at least six years — CRA can ask.
If that list feels like tax-speak, call your accountant before filing. If you need a real estate professional in Milton who understands these tax consequences, contact Tony Sousa — he connects buyers and sellers with local tax-savvy accountants and makes the paperwork painless.
Two clean examples — one exempt, one not
Example A — Your Milton house is your principal residence the whole time:
- Bought in 2010 for $300,000, sold in 2024 for $600,000.
- Capital gain = $300,000. Principal residence exemption covers the entire gain if you lived there every year.
- You still must report the sale and claim the PRE on your tax return for 2024.
Example B — You rented the basement for five years and claimed CCA:
- Part of the period the property was used to earn income, so PRE can’t cover those years fully.
- You need to calculate the portion of gain attributable to the rental years and report it as taxable capital gain.
- Also, if you claimed CCA (capital cost allowance), selling can trigger a recapture, which gets added to your income.
Common Milton-specific scenarios and what to do
Selling a detached home in a seller’s market
- High prices don’t change CRA rules. Report the sale. Claim PRE if applicable.
Selling a newly built house you flipped or a substantially renovated property
- If you sold new or substantially renovated properties frequently, CRA may view activity as business income, meaning proceeds may be fully taxable and GST/HST could apply. Talk to an accountant before you file.
Selling after renting out during ownership (e.g., student rentals near Wilfrid Laurier University or renters moving to Toronto)
- Calculate the number of years used as a principal residence vs. rented years. Partial PRE formulas apply. Keep rent records and expense details.
Selling a cottage or secondary property in Halton Hills or near the escarpment
- Secondary properties rarely qualify for full PRE. Expect capital gains tax unless you converted it to your principal residence and meet rules.
Selling a condo in Milton where you lived part-time
- If you didn’t meet the ‘‘ordinary people’’ test for principal residence (i.e., you didn’t ordinarily inhabit the property), you may face capital gains tax.
HST on the sale — quick clarity
- Resale (used) residential properties: generally no HST.
- New homes or substantially renovated homes: HST may apply. If you’re the seller of a newly built home in Milton, consult a GST/HST specialist.
Penalties and risks — don’t let paperwork bite you later
- The CRA requires reporting of principal residence dispositions on your tax return. Failing to report can lead to reassessment, interest on tax owing, and in some cases penalties.
- Not reporting can also hurt your position when you later sell another property with a taxable gain. The CRA uses its database to cross-check transactions.
If you believe you missed reporting a sale in a prior year, don’t panic. Voluntary disclosure to the CRA via your accountant may reduce penalties.
Records you must keep if you sold in Milton
- Purchase and sale agreements
- Closing statements and lawyer’s settlement statement
- Receipts for major improvements (roof, addition, renovated kitchen)
- Records of rental income and expenses if the property was rented
- Any GST/HST paperwork for new construction or substantial renovations
Store these digitally and physically for at least six years after the tax year of sale.
Action plan — 5 steps to finish this right (do them today)
- Gather your closing documents and purchase paperwork.
- Decide whether the property was a principal residence for all years you owned it.
- If unsure, book 30 minutes with an accountant who handles real estate tax in Ontario.
- Report the sale on your T1 for the year of sale. Complete Schedule 3 and the Principal Residence Designation if applicable.
- Keep all records and be ready for follow-up questions from CRA.
Need help? Tony Sousa works with Milton sellers and local tax pros. He’ll point you to the right accountant and make sure the sale closes cleanly without tax surprises.
Why Milton sellers should pick a local expert
Local markets move fast. Milton has unique buyer demand, pricing trends, and timing windows. Combining a local realtor’s market knowledge with an accountant who understands CRA’s real-estate rules prevents mistakes that cost thousands.
Tony Sousa is a Milton-based realtor with experience guiding sellers through tax reporting requirements and connecting them with trusted accountants. If you want someone who understands Milton property records, closings, and how the CRA reviews sales in Halton Region, reach out.
Contact: tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca
FAQ — Milton home sellers: fast answers
Q: Do I always have to report the sale of my home to the CRA?
A: Yes. Since 2016, the CRA requires you to report the disposition of a principal residence on your tax return for the year of sale. If you claim the principal residence exemption, you must complete the designation.
Q: If I lived in the house my entire ownership, will I pay tax?
A: Probably not. If the property was your principal residence for every year you owned it, the principal residence exemption can eliminate the capital gain. But you still must report the sale and claim the exemption.
Q: What if I rented part of my house in Milton?
A: Renting part of the property complicates the calculation. You may be entitled to a partial PRE, but you might also have to report capital gains for the rental period and recapture any CCA. Get professional tax advice.
Q: Do I ever pay HST when selling a house in Milton?
A: Most resale (used) homes are exempt from HST. New builds or substantially renovated homes may be subject to HST. Ask your accountant or builder.
Q: What documents will CRA ask for?
A: Purchase and sale agreements, closing statements, receipts for capital improvements, rental records, and any GST/HST paperwork. Keep them for at least six years.
Q: I sold my home years ago and didn’t report it. What now?
A: Don’t ignore it. Speak to an accountant about voluntary disclosure or amending prior-year returns. Voluntary compliance may reduce penalties.
Q: How can Tony help Milton sellers?
A: Tony connects sellers with trusted local tax accountants, explains what paperwork CRA expects at closing, ensures your sale documents are organized, and helps avoid closing delays caused by incomplete information.
If you sold or are planning to sell in Milton, don’t guess on taxes. Get it right. Email tony@sousasells.ca or call 416-477-2620 to schedule a consult and get a local pro to review your sale paperwork.
