Low-Cost Principal Residence Sale Reporting for Individuals in Canada

Income tax is tax charged on the income you earn in a year, levied by both the federal government and your province or territory. Rates are graduated, so successive slices of taxable income are taxed at higher rates, and credits such as the basic personal amount reduce the tax calculated. Employment income is taxed through payroll withholding and settled on your T1 return. Quebec residents also file a separate provincial return with Revenu Quebec.

CRA online filing for 2025 returns opened 23 February 2026 and closes 29 January 2027. Most people file between late February and the 30 April 2026 deadline, and that stretch is what tax season refers to. You can gather documents and prepare a return earlier, but it cannot be sent electronically before the system opens. Employment and investment slips such as T4 and T5 are issued by payers early in the year, and the CRA's Auto-fill service can pull the ones it already holds once you have set up My Account.

CRA online filing for 2025 returns opened on 23 February 2026 and stays open until 29 January 2027. You can prepare a return before the service opens, but it cannot be transmitted, and slips such as T4s and T5s often arrive only in late February. Filing early makes sense if you expect a refund. If you expect a balance owing, you can still file early and pay by 30 April 2026.

There is no single percentage. Canada uses graduated brackets, so the rate climbs as income climbs and each rate applies only to the income falling inside its own bracket. Your total combines a federal bracket with your province's bracket and is then reduced by credits, which is why two people on the same salary in different provinces pay different amounts. The share withheld from a paycheque also covers CPP or QPP and EI. Check the CRA bracket table for the year concerned.

A non-refundable credit reduces the tax you owe to zero but no further, so any unused part is lost, carried forward, or transferred to a spouse or parent where the rule allows it. A refundable credit is paid to you even when no tax is owed, which is how benefit-style payments reach people with little or no income. Most personal credits on the federal return, including the basic personal amount, are non-refundable.

Federal tax is the share of income tax that goes to the federal government, charged on taxable income in graduated brackets that are the same everywhere in Canada. Your total bill is that federal amount plus your province or territory's own tax, less the credits you claim. Payroll deductions shown on a T4 cover both layers. Quebec residents receive a refundable abatement of their federal tax because Quebec opted out of certain federal-provincial programs and funds them itself; separately, Quebec also collects its provincial tax through its own return.

Sign in to CRA My Account or the CRA's mobile app to see whether your return has been assessed and when a refund was issued; the enquiries line and your notice of assessment show the same information. An online return is usually processed in about two weeks, and a non-resident return can take up to 16 weeks. Direct deposit is the fastest way to receive it. A review, missing slip or existing debt will delay payment.

Set aside enough to cover income tax at your combined federal and provincial marginal rate on net business income, plus CPP: for 2026 you pay both halves yourself, 5.95% each on earnings between the $3,500 basic exemption and the maximum pensionable earnings of $74,600, and a further 4% each on earnings in the second band from $74,600 to $85,000. Keep any GST/HST you collect in a separate account, because it was never your money. Moving a fixed percentage of every deposit aside, then truing it up each quarter, works well.

Filing a GST/HST return late while money is owing brings a penalty calculated from the balance owing and the number of months the return is overdue, plus interest compounded daily. Filing late with nothing owing normally carries no penalty, though a return the CRA formally demanded does. File even when you cannot pay: filing stops the late-filing side from growing while you arrange the balance or a payment plan.

Property tax is municipal. Your city, town or rural municipality sets the annual rate and issues the bill, inside a framework the province sets: provinces create municipalities, run the assessment bodies that value properties, and add the education or school-support levy that appears on the same bill. The federal government has no role in property tax at all, so neither the CRA nor your income tax return is where a property tax dispute is settled. The municipality is.

Yes, but through your municipality rather than the CRA. Cities and towns run their own property tax portals where you can see the account balance, instalment dates and past bills using the roll or account number from your tax bill, and many also show the assessed value from the provincial assessment body. Property tax is not reported on a T1, though it can matter for a home-office claim or a provincial property-tax credit.

Taxes fund public services at three levels of government. Federal revenue pays for transfers to the provinces, benefit programmes for families and seniors, defence, debt interest and federal departments. Provincial revenue pays mainly for health care, education and social services. Municipal property tax pays for local services such as roads, water, waste collection, policing, fire and libraries. CPP contributions and EI premiums are separate contributory programmes with their own accounts rather than general tax revenue.