Taxation of Non Residents who Sell Canadian Real Estate

If you are a realtor working with a client who is a non resident of Canada, the following are some key steps to be aware when selling property.

A non resident who sells Canadian Real Estate will need to request for a certificate of compliance with the CRA agency within 10 days of the closing date. In order to get the certificate of compliance the seller must remit a 25% tax based on the gain of the property. It is advisable to request the compliance certificate prior to the closing date because if the buyer does not see this certificate they have the right to withhold 25% of the Gross Purchase price of the property in trust. The money will only be released upon presentation of the compliance certificate.

At the end of the year a tax return should be completed by the non resident in Canada to have the opportunity to reduce their taxes payable and get a potential refund by applying the costs associated with the sale of the property to reduce the taxable gain.

The above is a very simplified version of the process. Independent advice is required before proceeding.