Real Estate -> Buying real estate from a non-resident

When real estate is purchased from a non-resident of Canada, the non-resident is required to complete and submit a form to Canada Revenue Agency (CRA), along with a tax of 25% of the gain on the property.  CRA will then provide a certificate of compliance (T2064 or T2068) to the purchaser and the vendor.  If the non-resident vendor does not pay this tax, the purchaser of the property will be liable.  Thus, the purchaser may withhold 25% (50% in some cases) of the cost of the property.

The above tax applies to some other types of Canadian property besides real estate.  For more information on this topic, see the Canada Revenue Agency guide T4058 Non-Residents and Income Tax.

Tax tip:  Check on the tax implications when buying from a non-resident.

Revised: July 19, 2010