NON-RESIDENTS – BUYING AND SELLING REAL ESTATE IN CANADA

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Residence Status and Income Tax
If non-residents stay in Canada for more than 182 consecutive days, they may be considered Canadian residents for Canadian income tax purposes.

Non-residents of Canada pay tax on income received from sources in Canada. The type of tax paid, and the requirement to file income tax returns, depends on the type of income received.

Canada has tax treaties with many countries, including the United States. A tax treaty is designed to avoid double taxation for people who would otherwise pay tax on the same income in two countries.
– See more at: http://www.bcrea.bc.ca/working-with-a-realtor-/buying-and-selling-canadian-property#sthash.gSg79Hyr.

http://www.bcrea.bc.ca/working-with-a-realtor-/buying-and-selling-canadian-property

    Non-Resident Sales

When selling or disposing of Canadian real estate, non-residents must notify the Canadian government within ten days of the completion of the transaction to obtain a certificate of compliance. A certificate of compliance will only be issued if the CRA has received either a prepayment on account of the taxes owing or appropriate security for the prepayment.

On January 1, 2004, the CRA will start charging a financial penalty to non-resident owners of taxable property in Canada who sell that property and do not, within ten days, provide notice of the sale to the CRA.

In other words, CRA is tightening its tax reporting condition for non-residents who own Canadian property and will charge them the greater of either $100 or $25 times the number of days beyond the ten that pass before the sales notice is filed with CRA. For example, if a non-resident sells taxable Canadian property and does not notify CRA until 21 days after the ten-day grace period, that individual will be charged a $525 penalty ($25 x 21 days).

There are exceptions to this new policy, though an accountant or lawyer is best suited to interpret their applicability in a given situation. An individual can also apply to waive or cancel the penalty through a government “fairness committee.”
– See more at: http://www.bcrea.bc.ca/working-with-a-realtor-/buying-and-selling-canadian-property#sthash.gSg79Hyr.dpuf