Selling Property in Canada

Capital Gains Tax

As a non-resident selling Canadian real estate, you are required to pay capital gains tax. In general, this amounts to 25% of your total gain. Your lawyer is required to hold back 25% of the total sale proceeds while filing a Clearance Certificate on your behalf. Once the certificate is received, processed and approved, your lawyer will release the remainder of funds owing to you (the difference between the 25% holdback and 25% of your gain). Your lawyer will coordinate with an accountant regarding this filing and the costs are typically around $1000.

Rental Income

If your property has been a rental, you are required to remit tax on the rental income. If you employ a professional rental manager, they should withold 25% of your rental income for the purposes of remitting tax on your behalf and they'll submit an NR4 tax form.

Fees for its preparation and filing vary and usually range from $300-$1000, depending on the nature of the transaction.

Capital Gains Tax is not applicable on your principal residence if you are a Canadian resident. 

Property Tax is levied annually. The difference between Property Tax and Property Transfer Tax is that PTT is a one-time provincial tax which is charged at the time of title transfer and Property Tax is paid annually to the local taxation authorities. It is determined by applying the value of the property as assessed by the provincial assessment authority to the current tax rates as stated by the local tax authority. The amount can differ each year but generally Property Tax falls between 0.5-2.5% of the home's market value.

Other Expenses

Realtor's Commissions

Commissions are paid by the seller. Our commissions are typical of full-service agency commissions and are 7% on the first $100,000 of the sale price and 2.5% on the remainder. 5% GST is applied to the commission. Commissions are paid via a debit on the seller's statement of adjustments at the time of completion.

Legal Fees

Lawyer or notary fees will vary depending on the complexity of the transaction and are often $600-$1000. Your legal rep will review your contracts, search the title, draft mortgage documents and facilitate the closing.