Real estate

[Turnsawrench 0]

Hi all 

I came to the us to see if we were meant to be together and found that we did not want to be apart. I purchased a property as it was economically a better way to go than renting. 

 We did get married and applied for a change of residency which is still pending. As time was dragging out waiting for work permits etc money was getting tight and we decided as my wife has close family members with health issues that we would sell my property in Canada. This is where the problem begins. I get blind sided by an apparent rule from the CRA that they were going to hold 25% of the gross sale price of my property. No heads up from any of the professionals until the deal is done.

in trying to get answers I found one other person this had happened to and was informed it was horrible they took the money and sat on it until the taxes were filed for the year in which it was sold. In my case this will leave me in a horrible situation for possibly over a year. I don't think at this point I can do anything but if this helps anyone else I am glad. 

   Any comments would be appreciated Thx

[TBoneTX 46,294]

Apparently Canada-specific topic is moved from the Moving to the US forum to the Canada regional forum.

[dburnt 59]

My guess is that because you are now a US resident, that property is no longer considered a primary residence and could be subject to capital gains.  I had not heard of CRA requiring that, but I can understand it.

 

I sympathize, but I can honestly say that I have not been very successful with finding tax professionals that understand cross-border issues during the immigration process.  It wouldn't have occurred to me to check a tax accountant, but clearly real estate agents aren't sufficient.

 

If it is any consolation, my family is in the process of trying to sell a home for my deceased Canadian father which is in Netherlands, and no one in either country seems to know what the tax ramifications will be.  We have been told to assume it will be withheld in Netherlands, so I guess that is what is happening to you. 

 

Please let us know how it plays out, especially in regards to filing taxes.  Will you need to file as a Non-Resident in Canada?

[acidrain 325]

Once you are residing in the US any property still held in Canada is subject to what's called the "departure tax". From my understanding from the point you moved (e.g. Jan 1) to the date it is sold is how the tax is calculated. So for instance if your property went up in value $10,000 from Jan 1, 2015 to the time it sold Jan 1, 2018 there would be a 25% tax on $10,000. One of the questions that is asked when you go through a lawyer is whether you are a Canadian resident. You must answer honestly. If you are not the money is held because Canadians who are not residents do not have to file income taxes. It is the only way for the Revenue Canada to ensure they will get their cut. 

 

We were going to hang on to our rental property for 1 year after our move to make sure the US worked out. However, all non residents are subject to this tax so we sold all of our properties. I believe you can get the held amount back but you must square what you owe with Revenue Canada first.