Moving Companies Canada to US

[Krikit 1,164]

Ontario residents have to remain in Ontario 60 days post-closing to be considered resident if you don't want RC to withold 25% of the sale price.

Hmm. I was an Ontario resident. I think some clarification would help..... Revenue Canada will only hold the funds if you owe them back taxes and they haven't been paid, whether you are within Canada or not. This is why the Certificate of Compliance is required. You do not have to remain in Ontario 60 days post-closing.

I certainly hope not.

What exactly does "withold 25% of sale price " mean? Does RC hold onto the 25% and then release it to you after 60 days?

No. Go back to Post #9. Like I said, if you don't owe back taxes you have nothing to worry about. If you do owe back taxes you will have to pay them so Revenue Canada will release the Certificate of Compliance.

Ontario residents have to remain in Ontario 60 days post-closing to be considered resident if you don't want RC to withold 25% of the sale price.

Are you saying that Revenue Canada has a separate tax law for Ontario residents?

They're special.

[MsZ 6]

We talked to our lawyer and there is a requirement to stay in Ontario for 60 days post sale of a residence. If you are planning to leave, the lawyer must withold 25% of the sale price (not profit, sale price) at that time. I should imagine that you have to file your final exit taxes to get a refund.

The definition of resident is what matters here. If you leave and are deemed a non-resident you'll get hit with the 25% non-resident tax. And one of the definitions of a non-resident under the tax treaty is becoming a permanent resident elsewhere.

Of course the profit is really the only thing they'll tax, but they don't know what the profit will be until you file your taxes so they do it that way just to be safe.

Since we'd prefer to be considered resident and owe no tax on the profit, we're selling prior to leaving and also will remain in Ontario those 60 days. As it works out for us, this is quite doable.

[OBX 51]

Thanks again Krikit. I'm going by your earlier post.

[Krikit 1,164]

We talked to our lawyer and there is a requirement to stay in Ontario for 60 days post sale of a residence. If you are planning to leave, the lawyer must withold 25% of the sale price (not profit, sale price) at that time. I should imagine that you have to file your final exit taxes to get a refund.

The definition of resident is what matters here. If you leave and are deemed a non-resident you'll get hit with the 25% non-resident tax. And one of the definitions of a non-resident under the tax treaty is becoming a permanent resident elsewhere.

Of course the profit is really the only thing they'll tax, but they don't know what the profit will be until you file your taxes so they do it that way just to be safe.

Since we'd prefer to be considered resident and owe no tax on the profit, we're selling prior to leaving and also will remain in Ontario those 60 days. As it works out for us, this is quite doable.

Yikes. Time for a new lawyer, methinks. Or maybe it was just a misunderstanding.

What actually happens is that your lawyer will request a Certificate of Compliance from Revenue Canada because you will be deemed a non-resident if you leave the country prior to the closing date. (The certification process is not required if you are deemed a resident.) RC will do an audit then either send a letter requesting payment of back taxes or forward the Certificate of Compliance. The only time any monies are withheld is if you don't pay the back taxes. There will be no taxes paid on the sale of the home if it was your principal residence at time of sale. Therefore, there is no disclosure of the sale required on your taxes and no taxes payable on capital gains.

[trailmix 77]

We talked to our lawyer and there is a requirement to stay in Ontario for 60 days post sale of a residence. If you are planning to leave, the lawyer must withold 25% of the sale price (not profit, sale price) at that time. I should imagine that you have to file your final exit taxes to get a refund.

The definition of resident is what matters here. If you leave and are deemed a non-resident you'll get hit with the 25% non-resident tax. And one of the definitions of a non-resident under the tax treaty is becoming a permanent resident elsewhere.

Of course the profit is really the only thing they'll tax, but they don't know what the profit will be until you file your taxes so they do it that way just to be safe.

Since we'd prefer to be considered resident and owe no tax on the profit, we're selling prior to leaving and also will remain in Ontario those 60 days. As it works out for us, this is quite doable.

Yikes. Time for a new lawyer, methinks. Or maybe it was just a misunderstanding.

What actually happens is that your lawyer will request a Certificate of Compliance from Revenue Canada because you will be deemed a non-resident if you leave the country prior to the closing date. (The certification process is not required if you are deemed a resident.) RC will do an audit then either send a letter requesting payment of back taxes or forward the Certificate of Compliance. The only time any monies are withheld is if you don't pay the back taxes. There will be no taxes paid on the sale of the home if it was your principal residence at time of sale. Therefore, there is no disclosure of the sale required on your taxes and no taxes payable on capital gains.

Yeah, that just doesn't sound right at all MsZ

[Reeena 0]

I just sold my house here in Ontario, granted I am not a resident, and they gave me all the money. I don't file Canadian taxes, so I am glad they never took that money cause I could imagine it would be hard to get back.

[Flames9_RN 358]

Just me talking out of my Butt--but with a CR-1 or IR-1,when u cross the border and activate the Visa, i would think that is the day you are considered a permanent resident of the USA and a non-resident of Canada. I'm sure in the eyes of the USA,ur a permanent resident and I guess it al depends on what Canada thinks!! And like anything else with the govt,it seems it matters on who you talk to and what thier definition is! Look at EI and k1'ers. Soem EI employees are Ok with a K1 with no EAD getting benefits, while another employee says no way jose,you need the EAD document! Hope it all works out

[OBX 51]

Hope it all works out

I hope so too for my sake. It would not work for me to stay 60 days after closing as I would have nowhere to stay.

Either way once I get my visa I'm headed south - if Revenue Canada wants to hold on to some of my $ for 60 days do you think they would give me a better interest rate than the bank

[MsZ 6]

Doesn't selling as a non-resident make you liable for tax on the sale in the US then?

[OBX 51]

Doesn't selling as a non-resident make you liable for tax on the sale in the US then?

I spoke to the lawyer who will be handling the sale and I was told that once the contract of sale is signed I would apply for a certificate of clearance from Revenue Canada. The 25% holdback would only apply if the clearance is not received prior to closing. (She estimated that in simple cases such as this the certificate is usually received within 2 weeks.) The funds would be held in trust by the lawyer and released once the clearance is received.

So no taxes to be paid in Canada.

With respect to taxes liable as a US resident wouldn't you only be liable for any gains made since you became a resident which if we are dealing with such a short period of time should be negligible?

I'm still trying to get in touch with my accountant - the saga continues.