Residence VS non-resident of Canada

ALmost every one knows that as a non-resident of Canada, when selling the property in Canada, the seller need to pay tax for the profit. But seldomly aware that as a buyer,If you’re buying a house or condo and you suspect that the current owner from whom you are purchasing the property is a non-resident of Canada, you could be personally liable for the vendor’s Canadian capital gains tax if you don’t take certain precautions.

our Income Tax Act imposes an obligation on the purchaser to withhold 25 per cent of the purchase price from a non-resident unless the vendor has obtained a clearance certificate from the Canada Revenue Agency indicating that the non-resident has made appropriate arrangements to pay the tax.

If the non-resident doesn’t get a certificate, the Canadian resident purchaser is responsible for the 25 per cent tax owing on behalf of the non-resident unless, “after reasonable inquiry the purchaser had no reason to believe that the non-resident person was not resident in Canada.” 


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