{"id":126476,"date":"2017-10-25T02:37:57","date_gmt":"2017-10-25T06:37:57","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=126476"},"modified":"2017-10-25T02:37:57","modified_gmt":"2017-10-25T06:37:57","slug":"cra-analyzing-pre-construction-condo-flipping-cases-for-tax-avoidance","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2017\/10\/25\/cra-analyzing-pre-construction-condo-flipping-cases-for-tax-avoidance\/","title":{"rendered":"CRA analyzing pre construction condo flipping cases for tax avoidance"},"content":{"rendered":"
\"Real<\/a>
Real estate deals in the Greater Toronto Area and Vancouver have been the subject of greater scrutiny, including audits, the agency said. (Pixabay photo)<\/a><\/figcaption><\/figure>\n

Canada\u00a0Revenue Agency is analyzing 2,810 transactions involving cases of pre-construction condominium flipping in Toronto to determine whether audits need to be carried out to find tax evaders.<\/p>\n

In the Toronto area in particular, audit work has increased substantially on what are called \u201cassignment sales\u201d or \u201cshadow flipping\u201d in which a condo is purchased from a developer and sold to another buyer before the unit is completed, the federal government agency said Tuesday.<\/p>\n

\u201cThe profits from flipping real estate are generally considered to be fully taxable as business income,\u201d said CRA spokesperson Zoltan Csepregi in an emailed statement. \u201cThe facts of each case determine whether such profits should be reported as business income or as a capital gain.\u201d<\/p>\n

Real estate deals in the Greater Toronto Area and Vancouver have been the subject of greater scrutiny, including audits, the agency said.<\/p>\n

\u201cOver the years, CRA has made significant progress in using intelligence gathered through a variety of tools at its disposal as well as using experienced audit and investigations teams,\u201d noted Csepregi.<\/p>\n

\u201cNew technologies and faster computers are helping us to more effectively access, integrate, and analyze this data, resulting in better business intelligence.\u201d<\/p>\n

The CRA’s interest in tax avoidance in real estate is likely related to affordability issues in Toronto and Vancouver over the last couple of years, said Tsur Somerville, a senior fellow at the UBC Centre of Urban Economics and Real Estate.<\/p>\n

The average selling price of a condo in the Toronto area in the third quarter of this year rose 22.7 per cent to $510,206 from $415,894 in the same quarter last year, according to figures released by the Toronto Real Estate Board earlier this week.<\/p>\n

Meanwhile the benchmark price of an apartment in Greater Vancouver last month was $635,800, according to the Real Estate Board of Greater Vancouver, up 21.7 per cent from September 2016.<\/p>\n

Some have drawn a connection between speculation in the condo market and rising prices, Somerville said.<\/p>\n

\u201cWhen you’re sort of in a situation where for a lot of people affordability is a real crisis, the notion that somebody is making money off market conditions and then not paying their taxes, I think, is particularly acidic,\u201d Somerville said.<\/p>\n

As all levels of government face pressure to help housing affordability, Somerville said going after potential tax evaders is a political win.<\/p>\n

\u201cThe only people who lose on this are people who are evading taxes that the rest of us have to pay,\u201d he said. \u201cNo one is going to cry a river for folks who are avoiding their taxes on large gains.\u201d<\/p>\n

Particularly, he added, large sums of money that are seemingly easily earned.<\/p>\n","protected":false},"excerpt":{"rendered":"

Canada\u00a0Revenue Agency is analyzing 2,810 transactions involving cases of pre-construction condominium flipping in Toronto to determine whether audits need to …<\/p>\n","protected":false},"author":33,"featured_media":126480,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19,18],"tags":[28813,29483,27057,29482],"class_list":["post-126476","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","category-news-ca","tag-28813","tag-810-transactions-involving-cases-of-pre-construction","tag-canada-revenue-agency","tag-cra-analyzing-pre-construction-condo-flipping-cases-for-tax-avoidance","mauthors-aleksandra-sagan","mauthors-the-canadian-press"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/126476","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/users\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=126476"}],"version-history":[{"count":0,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/126476\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/126480"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=126476"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=126476"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=126476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}