Quote:
Originally Posted by PeanutButter
Also, how does the CRA not catch more people who don't claim rental income? I know people who have not been claiming rental income EVER, this is like 40 years of not claiming rental income.
It seems pretty easy.
If I was a manager there, I would hire a programmer to create an algorithm that would compile all tax returns from a house and if the last names didn't match, they would be flagged. I would then look at the tax returns of the homeowners and see if there were rental income claimed on their taxes. If not, instant audit of the homeowner.
Sounds like an easy way to get hundreds of millions in rental revenue overnight.
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CRA only audits about 30k people a year out of about 20m+ taxpayers so it's not worth looking at rental income within a principal residence and I suspect it's one of those "grand bargains" where they don't want to mess with a political problem of housing being so expensive that people need to rent part of it out to afford it. Imagine kicking up a storm about that and just 10% of landlords stop renting because it's not worth the trouble.
There's also a lot of write offs available (property tax, mortgage interest, upkeep) that someone could easily come up with ways to write-off most of the rental income. Whether you declare it or not the additional taxes you pay wind up to be pretty similar.