Navigating Property Sales as a Non-Resident in Canada
*Welcome to the latest episode of Real Estate Insights! In this episode, we cover key updates on the current interest rate announcement, explore the challenges of selling property in Alberta's competitive market, and provide a detailed guide for non-residents selling property in Canada.*
**Interest Rate Announcement:**
- The Bank of Canada has maintained the overnight rate at 5%.
- Inflation remains high, impacting market conditions across various provinces. Notably, Alberta continues to experience a strong sellers' market.- Inventory levels have increased slightly from last week 843 listings to 920 as of today.
**Selling as a Non-Resident of Canada:**
Are you a non-resident looking to sell property in Canada? Here are the crucial steps and considerations:
1. **Gathering Documentation:**
- Obtain your Mortgage Statement from your bank or mortgage broker.
2. **Legal Representation:**
- Consult a lawyer experienced in sales for non-residents to navigate legal complexities.
3. **Tax Implications:**
- Engage a Canadian tax accountant to apply for the CRA Clearance Certificate and manage tax filings related to income earned from the property sale.
4. **Realtor Expertise:**
- Work with a realtor well-versed in non-resident sales, including disclosure requirements and contract specifics.
- This may involve additional terms and contract adjustments.
5. **Tax Planning Post-Sale:**
- Consult with a tax accountant in your new country to understand capital gains taxation implications.
**Costs Associated with Non-Resident Sales:**
Selling property as a non-resident entails specific financial considerations:
1. **Legal Fees:**
- Expect increased legal fees for transactional support and additional closing labor.
2. **Holdback Requirements:**
- Funds held in the seller's lawyer's trust account, typically:
- 25% of sale price for primary residence sales.
- 50% of sale price for rental property sales.
3. **Compliance Documentation:**
- Obtain a compliant Real Property Report.
4. **Realtor Fees:**
- Budget for realtor commissions.
5. **Incidentals:**
- Factor in costs for property upkeep (e.g., snow removal, lawn care) if the property is vacant.
Navigating these steps and costs is essential for non-residents selling property in Canada. Understanding these intricacies with the right professionals can streamline the process and ensure compliance with legal and tax obligations.
