Important Considerations for Transactions Involving Non-Resident Sellers

For transactions where the seller is a non-resident, our branch's law firm has recently reminded us that the seller must obtain a Clearance Certificate from the Canada Revenue Agency (CRA). If the seller fails to do so, the buyer may be held responsible for any unpaid taxes and penalties owed by the seller.

This tax is generally 25% of the income portion, though specific cases may vary. The application for this certificate must be submitted within 10 days of the transaction closing.

In summary, non-resident sellers should consult with their accountant before listing their property on the market to ensure compliance and avoid potential tax liabilities.