The province of British Columbia has seen a significant rise in income tax and GST assessments due to increased audits on real estate transactions. In 2024, the number of these files reached nearly 1,100, a stark increase from the mere 114 assessments filed in 2015.

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If you have recently sold your home, it is highly likely that you will receive a notification from the CRA through their signature brown envelopes. While some may agree with the reassessment and pay accordingly, many taxpayers may find it necessary to challenge the decision.

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So what steps should you take in this situation?

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Learn Important Dates

First and foremost, it is crucial to familiarize yourself with the deadlines relevant to your file. By the time you receive the Reassessment in the mail, the clock is already ticking, and failure to act before the time expires will result in the CRA considering the additional taxes owed as accepted. You have a limited window of 90 days from the date listed on your reassessment (NOT the date you received it) to submit an objection. But what if you have already exceeded the 90-day period? This brings us to our next point…

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Contact a Lawyer

It is imperative to seek the assistance of a lawyer who specializes in tax disputes immediately. A reputable tax lawyer can offer guidance and ensure all your concerns are addressed throughout the process. and can potentially obtain an extension for submitting the objection. Though it is crucial to note that securing an Objection may become more challenging the longer you wait to file.

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Collect Relevant Documents

Now that you understand the deadlines and have contacted a tax lawyer, your next step is to gather all relevant documents. These may include utility bills, insurance papers, and bank documents that have your previous residence's address listed. These documents will aid your tax lawyer in demonstrating that you did, in fact, reside at the property in question.

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Take Notes

Lastly, make sure to note down all the reasons and circumstances surrounding the purchase and sale of your home. This may include factors such as an expanding family, changes in the neighborhood, rising cost of living or maintaining the property, relocation for work or school, among others. These notes will serve as a helpful reminder when discussing your case with your tax lawyer.

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It is crucial to act promptly if you receive a reassessment from the CRA. Being aware of the deadlines, seeking legal assistance, and collecting relevant documents will greatly strengthen your position in challenging the decision. Remember, the clock is ticking, and timely action is critical.

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