The Canada Revenue Agency (CRA) has recovered over $240 million from tax audits focused on real estate in B.C. and Ontario.
Over $210 million was collected from cases probed in Ontario between April 2015 and September 2016. Another $30.3 million was recovered in B.C., according to data posted on the agency's website.
The CRA investigates five central areas of concern when it comes to real estate:
- Questionable fund source
- House flipping
- Unreported income
- Unreported capital gains and unreported taxes
- Tax rebates claimed on home sales
Houses are pictured in Vancouver, B.C. on Sept. 22, 2016. (Photo: Ben Nelms/Reuters)
In Ontario, most of the money was recovered from audits related to rebates.
The rest came from GST/HST cases and income tax audits.
In B.C., money was recovered differently — most of the cash was collected after over 300 GST/HST audits. Meanwhile, $7.1 million was recovered each from income tax and rebate probes.
People from both provinces were slapped with $12.5 million in penalties after they knowingly made false statements when filing their tax returns over the past year and a half. The highest individual penalty was $2.5 million.
The CRA disclosed the figures months after it faced mounting criticism over a lack of attention to tax fraud in real estate, and as prices have climbed in hot markets like Toronto and Vancouver.
Concerns over enforcement of tax cheating in B.C. real estate were heightened this summer following a South China Morning Post report showing that federal auditors were aware of Metro Vancouver's problem for over 20 years.
Auditors found that immigrants declaring average income of $23,000 in 1996 had bought up 90 per cent of homes worth more than $600,000 in the Vancouver suburbs of Burnaby and Coquitlam. Buyers could be identified in all the cases.
The feds found "similar demographic results" for sales in Vancouver — but their work was "ignored," an unnamed source told the newspaper.
The Globe and Mail later published a story showing that housing speculators were taking advantage of loopholes and lax oversight by understating their income.
The CRA subsequently announced it would take a closer look at tax evasion in Canadian real estate, CBC News reported.
Condos under construction in Toronto's Yorkville area. (Photo: Andrew Francis Wallace/Getty Images)
The numbers reflect an effort to increase scrutiny of tax cheats, but they also show there's more work to be done in B.C., The Globe and Mail reported Wednesday.
Almost six times more files were audited in Ontario than on the West Coast, despite its population being only three times bigger, the newspaper said.
"We are making a clear effort in British Columbia and our goal is to recover as much money [as in Ontario], if not more," Revenue Minister Diane Lebouthilier told the Globe.
Also on HuffPost