Sale of Canadian Properties for Non-Residents

If you are currently selling a Canadian property but are a non-resident, there are some specific facts you must know when it comes to filing your taxes. It can be challenging to figure out what forms to fill out as well as who to turn them into. It is essential that you file your taxes correctly so that you can decrease the chances of experiencing a delay.

If you are selling a property that is located in Toronto, you will be responsible for paying a non-resident tax in Toronto Ontario. You are subject to paying a withholding tax of 25% of the sale price of the property. If the property that you are selling has depreciated since the purchase, you are then required to pay 50% of the sales price of the property.

Reducing Withholding Tax

It is possible to request the non-resident tax to be withheld on the capital gain instead of the overall gross sale price. This will require that you file the proper forms with the CRA and also getting a Certificate of Compliance. Even if you do decide to obtain a certificate of clearance to reduce the taxes that are withheld, you still most contact the CRA within 10 days within the property’s sale. For every single day that you are late, you will be charged $25 daily with a cap at $2500.

Tax Return

You are still required to file a tax return in Canada for the year in which the sale of the property took place. You can then deduct the cost based off of the property and then receive a credit for the cost of sale. This has the potential to refund a small portion of the withheld taxes. You will need to speak with an accountant to learn more about your tax return and how much of the taxes will actually be withheld.

If you are a non-resident it is not only essential that you hire a realtor to assist with the sale, but it also crucial that you hire an accountant to help you with the filing of your taxes. As a non-resident, filing your taxes can be a bit more complicated than if you were a resident of Canada. Your accountant can walk you through the entire process and make sure that you file each portion of the paperwork within the deadlines as not receive any financial penalties.

To learn more about non-resident tax in Toronto Ontario, contact The Taxperts Group. They can help ensure your taxes are filed correctly. Visit their website to learn more.

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