Non-Resident’s Buying or Selling Canadian Real Estate

This page is designed to inform Non-Residents of the implications of Buying and Selling Real Estate in Canada.

 

Click the Links to Learn More:
  • CRA RULES

Consult with your Tax Professional about your specific situation.

 

 

 

What is The Realty Deal Team’s Role?

  • Verify Your Identity, Employment, Location of Residency
  • We will urge you to receive advice on Tax Matters
  • We will Review Comparable Properties, after addressing the above stated urgent matters
  • Do Your CRA Homework Upfront – Making Inquiries and Fulfilling Requirements could take weeks

  • If a Client Confirmed with the CRA that they are a Non-Resident Seller for Tax Purposes, they will have to:

 

Non-Resident Home Buyers

Buyer Requirements:

 

  • First, we will confirm if you are a Canadian Resident for Tax Purposes
    • Example, if you are a Canadian Living Abroad, you can qualify as a Non-Resident depending on how much time you spend abroad.
    • Tax Status is Based on Presence vs. Citizenship
    • Ex: International Student Living in Canada for 3 years vs Ottawa-born person Living Abroad for a decade.
  • Second, You, The Buyer, will be Satisfied on Your Tax Status based on your discussion with the CRA.
If You, The Buyer is not Satisfied with the information you obtained from the CRA, and believe the Seller is a Non-Resident for Tax Purposes, the Buyer is Entitled to withhold 25% of the proceeds, minus the amount of the certificate limit, if any. (the total amount payable may differ).
REMEMBER:
  • There could be tax implications for the Buyer, if the Seller is a Non-Resident.
  • We need to be aware of the Sellers Tax Status
  • Also be aware of the Buyers Requirements/Impact
  • We must Review Residency Provisions in the Agreement of Purchase and Sale (APS) and other documents
  • You MUST Take Steps to Minimize your Risk
  • Buyers must Inquire with their Tax Consultant/Accountant to address Tax Concerns, and the CRA, and be Satisfied (with the Sellers Status), or Withhold (about 25% of the proceeds of the sale.
If the Agreement of Purchase and Sale does not declare the Sellers Tax Status, we will:
  • Have the Sellers sign a separate document: ‘Declaration of of Residency’
  • Document Communications with the Listing Agent to find out Sellers Status
  • Any concerns about Sellers Status, hold back 25% of Sales Proceeds, until they have met their requirements with the CRA.
  • Buyer will Consult with Lawyer and Tax Accountant/ Specialist (Lawyer will Confirm Sellers Status and Information)
  • Lawyer will Review APS, and request proof from CRA on Sellers Status
  • Seller Should: Get Proof of CRA Opinion

 

Click Here to Find a Non Canadian Resident Mortgage Lender

 

 

Talk to Stephanie@TheRealtyDeal.com about Buying or Selling Your Home in Canada, as a Non-Resident

 

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