Image: Dave Heuts / Flickr
I’ve already given some tips on how to move across the country. However, if you are moving out of the country, there are some further points you need to remember.
First of all, any time you sell a home, you have to prove that you are a Canadian resident for the purposes of taxation. If you are not a resident, you have to get from Revenue Canada a certificate of compliance. Residents do not have to pay taxes on any proceeds they may make from the sale of a principal residence. However, non-residents will have to pay some capital gains tax unless they can get exempted by Revenue Canada.
If you are the buyer of the property, and the seller has not paid tax and has left the country, it can get you into trouble: you might be liable for the taxes owed. You can protect yourself from this by withholding 25% of the purchase price of the property until the seller shows you the CRA’s certificate.
If you need to get the certificate, it is wise for you to apply for it as soon as you begin marketing your property. Simply include the price you expect to get for the property. The certificate can take up to two to three months to arrive, and if you don’t file a certificate within ten days of sale, the buyer will become liable for the taxes that the seller should have paid.
As well, for the year the sale was completed, the seller must file a tax return. You can claim some of your legal fees and closing costs to ensure that you aren’t overpaying.
To get a fuller idea of what is required when a non-resident sells a home in Canada, go to the Canada Revenue site here.
And as always, any financial transaction of this complexity should only be undertaken with a lawyer and real estate agent. They will help you navigate the issues around this topic, and make sure that you aren’t paying more than you need to.
Nelson Goulart
Broker of Record with Signature Service GMAC Real Estate
www.ssgmac.ca
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