Non Residents Real Estate information Page
What do you need to know about buying or selling Real Estate in Vancouver if you are not a resident of Canada.
Non Resident Buyers of Real Estate in Vancouver
You can own property in Vancouver but there are some important considerations.
Mortgage qualifications in Canada are different for non-resident buyers than for Resident Buyers. Non-resident buyers should talk with a bank or mortgage broker to understand the down payment and mortgage options for a non-resident buyer. You will also need to open a Canadian bank account in person.
Non-resident buyers do not need to be present in B.C. to execute closing documents but you do need a lawyer or notary in B.C. A number of lawyer and notary firms, including Bell Alliance, utilize technology to streamline the closing process for non-resident buyers, such as Electronic filing of paperwork and special transfer of monies. (It is especially important to advance the purchase funds well in advance of the closing date.)
Non-Resident Buyers should consult with a Canadian tax professional to discuss tax treatment both during the period of property ownership and on disposition.
A non-resident owner of rental property will be subject to a 25% withholding of taxes on the gross rental income. Administrative rules require that the owner or agent remit these amounts to the Canada Revenue Agency.
Non Resident Sellers
To avoid liability for non-resident sellers’ unpaid taxes, purchasers must withhold a portion of the sale proceeds until a non-resident seller has provided a Clearance Certificate from the Canada Customs and Revenue Agency. The holdback is normally 25% but could be higher depending on the use of the property.
A non-resident seller should retain the services of a tax professional to assist in obtaining a Clearance Certificate. This should be done as soon as possible as the process can take six to eight weeks.
A Clearance Certificate will only be issued once the tax is paid.
Canada Customs and Revenue Agency will review the particular sale transaction to determine whether or not capital gains tax is payable but will also require payment of any other taxes outstanding or payable by the seller.
The seller can claim certain expenses in determining the adjusted cost base including Property Transfer Tax, Goods and Services Tax, legal fees on the original purchase, and any capital improvements made, including strata assessments.
The commission and tax and legal fees on the sale are not deductible for purposes of calculating tax owing at the time of the sale. The seller can claim these expenses by filing a Canadian tax return subsequent to the sale.