NON-RESIDENT SELLERS
Whenever a non-resident sells Canadian real estate, the non-resident is required to pay the appropriate amount of taxes on any gain.
The non-resident seller must provide to the buyer, on or before closing, a clearance certificate from Revenue Canada. This certificate certifies the amount of money that is payable for taxes. The amount owing is deducted from the sale proceeds and sent directly to the federal government by the seller's lawyer.
This certificate may be applied for in advance of the completion date by the seller, but not until there has been a contract of purchase and sale with all subjects removed. The waiting period for this certificate is usually 6-8 weeks. If the certificate is not obtained, the purchaser is required to hold back from the sale proceeds a percentage of the selling price (usually 25-50%).
The above information is for general information purposes only and not intended in any way to be legal advice. Please contact your lawyer to obain specific legal advice and complete details. E. & O.E.