CRA fines Vancouver realtor $103,785 for pretending a rental property was her home

On August 25, 2026, Thi Nhan Nguyen, also known as Lynn Nguyen, was sentenced in B.C. provincial court to a nine-month conditional sentence and fined $103,785 — the same amount she evaded in income tax by falsely claiming a rental property as her principal residence.

In Canada, the principal residence exemption — where homeowners shelter capital gains from taxes when selling their home — is considered one of the most valuable tax breaks available to Canadian homeowners. It’s also one of the main triggers for a CRA tax audit.

For any Canadian who owns more than one property, the Nguyen case shows exactly what kind of paper trail is used to catch these types of falsified principal residence exemption (PRE) claims. Furthermore, it's a good reminder to find out whether your property still qualifies for the exemption.

Why the CRA just fined a B.C. landlord nearly $104K for lying about her "principal residence"

Nguyen became the registered owner of a Vancouver residential property in April 2012, which she would then sell in 2017. During the entire five years of ownership, a tenant lived in the home; at the same time, Nguyen fabricated documents and took steps to make it look like her primary residence — including using the address for correspondence and arranging to pick up mail at the property on a regular basis.

When Nguyen disposed of the property, she sold a 50% interest to a buyer and transferred the remaining 50% to a related party; however, she did not claim the sale when she filed her 2017 return.

CRA auditors began to ask Nguyen questions about the property and transaction in 2017. At that time, Nguyen, through a representative, continued to claim that the rental property had been her principal residence. She backed up this assertion by providing misleading information.

After almost a decade in the court system, Nguyen eventually pleaded guilty to one count of tax evasion under the Income Tax Act. She was handed the hefty fine while also receiving a nine-month conditional sentence for evading taxes.

Why the exemption is not a paperwork trick

A PRE lets Canadians sell their primary home without paying capital gains tax on any increase in value. But the exemption only applies to a property you or your family actually lived in — what the CRA describes as “ordinarily inhabit” — not one you own on paper while a tenant lives there.

Since Nguyen did not ordinarily inhabit her rental dwelling, the property cannot be considered a principal residence, for tax purposes.

How a CRA rule change affected her case

About a year before Nguyen sold her rental property, the CRA amended its disclosure requirements. That meant any property sold had to be reported, starting with the 2016 tax year. As a result, all Canadians must now complete Form T2091(IND), even when the entire capital gain on the property is exempt.

Skipping that step — or designating a rental property that was never actually your home — doesn’t just trigger tax, it adds fines, interest and, in some cases, turns into a criminal matter.