Non-Residents of Canada Selling a property in Canada
If you are a non-resident for income tax purposes as per Canada Revenue Agency (CRA), your lawyer will need to holdback 25-50% of the sale proceeds until you have received a clearance certificate from Canada Revenue Agency. You will need to consult with a tax expert, CRA or an accountant to determine your residency. The amount held back will depend on whether the property is depreciable or not. There must be enough proceeds after payment of mortgages and other expenses to satisfy the holdback amount, otherwise you will need to provide the shortfall.
Assignments are complex transactions that involve multiple parties with two or more closings. The assignment agreement dictates the process and terms of the transaction. Its important the assignment agreement is reviewed by a lawyer at the outset, to ensure the transaction is completed as intended and expected. Assignors and Assignees are not familiar with many risks of these transactions, such as builder adjustments, default, HST rebates, incentives that may not be transferable and many other important clauses. Have your agreement reviewed.
Many times, we act on multiple units for different clients in the same project and note that the builder adjustments may vary depending on amendments the builder has agreed to with other purchasers. For example, development charges may be capped on one unit and not on another unit. If you have had your agreement reviewed with a lawyer during the cooling period it is likely that you have more favourable terms than a purchaser in the same project who did not have their agreement negotiated. Agreement review of a pre-construction unit during the cooling period is worth the extra cost.