Your bank may report your Vancouver Investment Properties to the CRA!
Recently I had a conversation with a Credit Union manager, who implied that they will be asking for tax returns for all real estate investors. This news in itself doesn’t surprise us, as many major banks have started to ask for these on a more regular basis. The real story came up when I asked him why he needed them, as I assumed they would be using them to determine how much rental income they could use from the portfolio.
Here’s the shocker. The CRA has asked the Credit Union to report to them all individuals who have rental properties on their application who have not reported them on their tax returns. Watch out, we were warned, as your bank may report you to the CRA. He mentioned that this is likely to be an issue and will be more publicized in the near future as more lenders start asking for T1 Generals to confirm rental income.
This is interesting as many lenders have already been requesting T1’s for the past year, so the question is whether they have already been reporting this or not. We know that pressure from OSFI (Office of the Superintendent of Financial Institutions) was what caused certain lenders to begin asking for tax returns. Although the thought had crossed our minds that perhaps part of this was done to help the CRA, this hadn’t been confirmed by a lender until now.
File your taxes in case your bank reports you to the CRA!
Kyle Green is our mortgage expert, you can reach him through his website www.kylegreen.ca