Can Non-Residents Sell Property in Canada?
Absolutely! Non-residents are permitted to buy and sell residential property in Canada. While the process is largely the same for both residents and non-residents, there are certain legal and tax considerations non-residents need to be aware of. Non-residents can secure mortgage loans, rent out properties for long-term or short-term rental purposes, and generate income, just as Canadian residents can. However, they must meet specific tax and filing requirements along the way.
What Are the Key Steps for Selling Property in Canada as a Non-Resident?
1. Partner with an Experienced Real Estate Agent
The first and most crucial step is to partner with a licensed real estate agent who specializes in assisting non-residents. Diane Walker of Your Home Sold Guaranteed has the knowledge and expertise to guide you through the entire selling process, from pricing your property to handling all paperwork and tax-related matters. Having a trusted expert by your side will save you time, minimize stress, and ensure the transaction goes smoothly.
2. Get Your Property Professionally Appraised
Accurate pricing is key to selling your property quickly and at a fair price. Diane will connect you with licensed appraisers to determine the current market value of your property. Overpricing may cause the property to linger on the market, while underpricing means you won’t get the return you deserve.
3. Create a Winning Pricing and Selling Strategy
Understanding local market trends is essential. Diane will work with you to evaluate whether it's a buyer’s market, seller’s market, or a more balanced environment. She will ensure you set a competitive and realistic price, one that will attract serious buyers without letting the property sit too long. Diane’s selling strategy will also include recommendations for staging, repairs, or upgrades that can help your property stand out to potential buyers.
4. Apply for a Clearance Certificate
As a non-resident selling Canadian property, you must apply for a Clearance Certificate from the Canada Revenue Agency (CRA). This certificate verifies that all taxes related to your property have been paid. The process can take up to six months, so it’s recommended to begin early. If you wait until after the closing date, you must apply within 10 days of closing.
In addition, non-residents face a withholding tax of 25% on the property’s gross sale price, which serves as a deposit until you file your tax return. The rate increases to 50% for rental properties. Diane will assist you with the application process and ensure all necessary tax filings are handled properly.
5. File Your Canadian Tax Return
After the sale, non-residents must file a Canadian tax return for the year of the sale. Diane will guide you through this process to ensure you deduct the adjusted cost basis of your property and any expenses incurred during the sale. It's important to meet deadlines to avoid penalties.
6. Notify the CRA of the Sale
If you choose not to apply for a Clearance Certificate, you must notify the CRA of the sale within 10 days. Failing to do so can result in penalties, so it's critical to stay on top of deadlines. Diane will ensure all the necessary filings are done correctly and on time.
Is the Selling Process More Complicated for Non-Residents?
The selling process for non-residents is a bit more involved than for Canadian residents due to additional tax requirements and paperwork. Non-residents are subject to additional tax regulations, including filing specific forms and applying for clearance certificates. It’s also important to note that the Canadian government has recently introduced regulations like the Underused Housing Tax and Prohibition on the Purchase of Residential Property by Non-Canadians Act to address the housing market. Diane Walker is well-versed in these new regulations and will guide you through them with ease.
Final Thoughts
Selling your Canadian property as a non-resident can be complex, but it doesn't have to be overwhelming. With Diane Walker of Your Home Sold Guaranteed by your side, you’ll have expert guidance every step of the way. From the initial planning to the final paperwork, Diane’s experience in the Canadian real estate market ensures you’ll make informed decisions, avoid penalties, and achieve a successful sale.
Get in touch with Diane today to discuss your options and start the process of selling your property in Canada!