October 18, 2022
“Can the Canada Revenue Agency take my house if I owe back taxes personally?”
This is a question that keeps a lot of people up at night. The short answer is yes, but let’s expand on that a bit.
What actions can the CRA take?
If you owe money to the CRA and do not or cannot pay the amount voluntarily, the CRA can take legal action that generally consists of:
- Garnishing wages or other income sources through a Requirement to Pay
- Garnishing bank accounts through a Requirement to Pay
- Seizing and selling your assets
These actions usually only take place when a reasonable arrangement based on your ability to pay cannot be arrived at, or if there is a lack of communication with the CRA that makes them suspicious.
With respect to seizing and selling your assets, you should be aware that this can be a long process for the CRA to go through, and there may be opportunities during this time to resolve your matter before it comes to this.
What’s the process for taking my assets?
In order to seize and sell your assets, the CRA must first register a certificate in the Federal Court of Canada in the amount of your unpaid balance. This is a lien on your property. When registered, it has the same effect as a judgment obtained in Court. If the balance remains unpaid, or there is no payment arrangement arrived at, the CRA may obtain a writ (a formal written order in the name of a court) to seize your assets and have them sold at auction by a sheriff or bailiff.
While it is the case that, in terms of seizure and sale, the CRA generally targets assets other than the primary residence such as vacation properties, rental properties, equipment, vehicles, boats, etc., it must be understood that the CRA can and has seized primary residences like the family home if there is no other option.
The former CRA advisors at Farber Tax Solutions have decades of combined experience and will help you find the best possible resolution to any tax dispute you may have with the CRA (letting you sleep a little better in the process).
Get a free and confidential consultation here to have your tax dispute questions answered by our advisors.