Selling for Non-Residents
One of the biggest factors in determining how you can be successful selling your property as a non resident is choosing an agent that can serve your individual needs and serve as a reliable connection point between you and the Vancouver market where your property resides. Consider the following aspects that will be critical to the success of your listing:
- Local Market Knowledge – From the Downtown core to the Tricities, Greater Vancouver has a diverse range of market characteristics and trends. Our in depth knowledge of these nuances and how to leverage them can make all the difference in selling your property for top dollar.
- Facilitation and Flexibility – We pride ourselves in accommodating our clients needs by communicating within their time zone and availability. We will utilize our local network of agent contacts and staging/marketing services to prepare your property for success, even when you can’t be there. We can also refer you to other trusted businesses such as real estate lawyers and notaries who will be necessary in facilitating your transaction.
- The Latest Technology – From Skype and social media to digital document sharing, we pride ourselves in making the sales process for our non-resident sellers simple, seamless, and as hands-free as possible.
Costs to sell and taxation
As a non-resident, there will be several property sales prep costs as well as tax implications to consider. According to the Canada Revenue Agency (CRA), you are considered a non-resident of Canada if you:
- normally, customarily, or routinely live in another country and are not considered a resident of Canada; or
- do not have significant residential ties in Canada; and
- you live outside Canada throughout the tax year; or
- you stay in Canada for less than 183 days in the tax year.
Note: there are a few other exceptions listed on the CRA website.
As a non-resident, it’s important that you speak to an accountant about how the sale of yourCanadian real estate will be taxed. The following serves as a guideline only.
In most cases, non-residents are subject to tax on any income or gains resulting from the sale of a taxable Canadian property, including residential homes, condos, vacation properties or land. When a non-Canadian resident sells a property, the Buyer of the property must withhold and remit a portion of the purchase price to the Canada Revenue Agency (CRA). Generally this amount is 25% of the gross selling price.
Alternatively, a Certificate of Compliance related to the sale of the property can be filed and approved by the CRA to reduce or eliminate the withholding taxes. Upon filing of this Certificate of Compliance, the 25% withholding tax required is calculated on the gross sales proceeds net of the purchase cost of the property (or in other words, the net profit). A non-resident selling property in Canada must notify CRA of the intention of sale or within 10 days after the sale.
Also, non-residents are required to file a Canadian tax return by April 30 following the year they sold their property. Generally, upon filing a tax return, part of the withholding tax is refunded to the Seller as the 25% withholding tax is usually a lot higher than the actual taxes owing. At this point, you can also claim expenses like legal fees and commissions against the income from the sale.
