Timing receiving the visa and selling property

[mam521 2,111]

On 5/28/2022 at 6:08 PM, Ksamwise20 said:

 "Resident CRA doesn't speak to non-resident CRA and things get confusing, fast." can you clarify this part a bit? 

We actually are thinking of renting our place long term out instead of selling. I know it would be super annoying if we decided to sell after moving to the US, but just trying to think if our kids ever wanted to move back to Canada when they were older. Will definitely talk to a cross border accountant soon too. 

There are 2 divisions of CRA - resident and non-resident.  The year you move, you have to deal with both.  Once your substantial presence is US, you deal with non-resident.  BUT, they don't talk to each other.  So, you may call and the resident line says you're clear, no taxes owed, but you still owe and have to speak to non-resident separately.  Resident CRA will withhold 25% until  your clearance certificates are obtained.  

 

If you do keep the property, you are going to have to withhold 25% of your rental income and continue to file taxes in Canada.  If you can easily afford to hold back that 25%, it's not that big of a deal, but if you're reliant on renters to pay the mortgage plus 25% and that 125% total isn't within market range, it's going to be a struggle. 

[waterlooengineer 30]

58 minutes ago, mam521 said:

There are 2 divisions of CRA - resident and non-resident.  The year you move, you have to deal with both.  Once your substantial presence is US, you deal with non-resident.  BUT, they don't talk to each other.  So, you may call and the resident line says you're clear, no taxes owed, but you still owe and have to speak to non-resident separately.  Resident CRA will withhold 25% until  your clearance certificates are obtained.  

 

If you do keep the property, you are going to have to withhold 25% of your rental income and continue to file taxes in Canada.  If you can easily afford to hold back that 25%, it's not that big of a deal, but if you're reliant on renters to pay the mortgage plus 25% and that 125% total isn't within market range, it's going to be a struggle. 

 

If the house is sold (offer accepted) when the visa is in hands but the closing date is after the US LPR has been activated at the border, what kind of taxes are we looking that will be owed to CRA and IRS?

The property in question is the primary property that I live in. 

[mam521 2,111]

17 minutes ago, waterlooengineer said:

 

If the house is sold (offer accepted) when the visa is in hands but the closing date is after the US LPR has been activated at the border, what kind of taxes are we looking that will be owed to CRA and IRS?

The property in question is the primary property that I live in. 

You'll have to talk to an accountant.  If you haven't actually moved, you might be OK and I hope that's the case for you!  Otherwise, my sincerest good luck in getting the clearance certificates from the Canadian government.  

[waterlooengineer 30]

1 hour ago, mam521 said:

You'll have to talk to an accountant.  If you haven't actually moved, you might be OK and I hope that's the case for you!  Otherwise, my sincerest good luck in getting the clearance certificates from the Canadian government.  

No I haven't moved, I am still at NVC but I am planning things out for later. 

Sorry but can you please let me know what are the clearance certificates? 

[mam521 2,111]

2 hours ago, waterlooengineer said:

No I haven't moved, I am still at NVC but I am planning things out for later. 

Sorry but can you please let me know what are the clearance certificates? 

Depending on when you move, substantial presence may leave you as a resident of Canada for tax purposes, which may eliminate the need, but here's the link.  https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2062.html

[mam521 2,111]

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/disposing-acquiring-certain-canadian-property.html