As a non-resident of Canada, navigating the intricacies of selling a property can be a complex process. From withholding taxes to obtaining a certificate of compliance, it’s crucial to understand the requirements to ensure a smooth transaction. At Tax Return Filers, we offer intuitive e-filing services designed to simplify the tax filing process for non-residents. Our platform combines expert advice with user-friendly technology, ensuring accurate tax returns at a reasonable cost.
The Complex Process of Selling Property as a Non-Resident
Selling a property as a non-resident in Canada involves specific procedures and regulations. When you sell a property, your lawyer will withhold 25% of the gross sales proceeds in a trust account until you provide a certificate of compliance. Failure to obtain this certificate could result in your lawyer remitting the withheld funds to the Canada Revenue Agency (CRA), leading to a lengthy process to retrieve the money.
Understanding the Withholding and Compliance Process
Let’s consider a scenario where you own a house in the Greater Toronto Area (GTA) or elsewhere in Canada. You decide to sell the house for $500,000, with an original purchase price of $100,000 ten years ago. Upon closing the sale, the purchaser will withhold $125,000 (25% of the sales price) in your lawyer’s trust account. To prevent remittance to the CRA, you need to provide a comfort letter to your lawyer while the certificate of compliance application is in progress.
Capital Gains and Tax Payment
In the above example, your capital gain would be $400,000 ($500,000 – $100,000). The CRA will send a tax payment request letter, which is typically 25% of the capital gain. In this case, the tax payment would amount to $100,000. Your lawyer will remit this amount to the CRA, and upon receipt, the CRA will issue a Certificate of Compliance. Once you receive a copy of the certificate, your lawyer will release the remaining funds held in trust ($25,000 in this case).
Simplify the Process with Tax Return Filers
Navigating the non-resident tax filing process can be challenging, which is why it’s essential to seek expert advice. At Tax Return Filers , we have a team of experienced accountants who specialize in non-resident taxation. Our user-friendly e-filing platform streamlines the process, ensuring timely compliance with all tax requirements. Late filing of the certificate of compliance application may result in penalties, making it crucial to stay on top of your tax obligations.
Selling a property as a non-resident in Canada requires careful adherence to tax regulations and compliance procedures. Tax Return Filers offers a comprehensive solution, combining technology and expert advice to simplify the tax filing process. By leveraging our intuitive e-filing platform, you can ensure the accurate and timely submission of your non-resident income tax returns. Don’t let the complexities of tax filing overwhelm you—trust Tax Return Filers to guide you through the process seamlessly. Contact us today to get started and avoid any penalties associated with late filing.
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