If you live in another country and are a non-resident who is looking to sell a property in Vancouver, we can certainly help you. When you're selling a property outside of your country, you require professional services to ensure everything goes smoothly. We offer experienced representation in international real estate dealings.
International Home Sellers
Purchasers must withhold a portion of the sale proceeds until a non-resident Seller has provided a Clearance Certificate from the Canada Customs and Revenue Agency, CRA. The holdback is normally 25% of the purchase price, To avoid liability for non-resident Sellers’ unpaid taxes, but it could be higher depending on the use of the property i.e. a rental property.
A non-resident Seller should retain the services of a lawyer or tax professional to assist in obtaining a Clearance Certificate. There are only two lawyers who do this in Vancouver; the cost is typically less. The certificate should be applied for as soon as possible; the process can take six to eight weeks or more. The wait is usually the longest during the summer months.
Not only will the CRA review the sale transaction to determine whether or not capital gains tax is payable, but they will also require payment of any taxes owed by the Seller. A Clearance Certificate will only be issued once the tax is paid, therefore a Seller can claim hardship to expedite the issuance of a Clearance Certificate under circumstances where the holdback would not leave sufficient funds to payout an existing mortgage at the closing.
The Seller can claim some expenses including: Property Transfer Tax (PTT), Provincial Sales Tax, legal fees on the original purchase, realtor fees, and any capital improvements made. These include strata assessments. The expenses are not a means of calculating the tax owing at the time of sale, but rather the Seller can claim these expenses by filing a tax return at after the sale. Thanks CRA!