If you are a Non-Resident Seller you will need a Clearance Certificate. You can obtain a Clearance Certificate from Canada Customs & Revenue Agency only after you have an accepted offer on your property. You will need the Clearance Certificate prior to the Completion Date of your transaction. The current wait for a Certificate is approximately 6-8 weeks. Should the Completion Date be prior to the issuance of the Clearance Certificate, the purchaser's solicitor will require a holdback of between 25-50% of the sale price until the Clearance Certificate is issued. Canada Customs & Revenue Agency will collect any tax payable on the property before issuing a Clearance Certificate. This also includes any tax payable on the rental income from the property that has not been remitted; capital gains tax; and, if applicable, recapture of a capital cost allowance.
Capital Gain is an increase in the value of real estate that gives it a higher worth than the purchase price. The gain is not realized until the property is sold. A capital gain must be claimed on income taxes.
Revenue Canada does not allow any deductions from the selling price in determining the gain, and the rate of the Capital Gain Tax is 33.33%. However, by filing a Canadian tax return with Revenue Canada after the sale, some of the tax paid may be recovered.
*The information contained on this page is for information purposes only and does not constitute as legal advice. Although, drawn from sources deemed to be reliable, the accuracy and completeness of the information is not guaranteed. Diane Luu or Legend Real Estate Group does not assume any responsibility or liability. Any distribution, use or copying of the content on this page is prohibited.