Am I liable for withholding tax on sale of a property?

Fructose · Post by **Fructose** » Sat Apr 28, 2012 9:37 pm

Hi

My wife and I are joint-owners of a residential property in Canada, where we both used to live and are Canadian citizens.

However I have moved to live/work in the US a year ago and am thus now a non-resident.

If we sell the apartment (which has not been used for rental income) will we be subject to withholding tax?
And if so how does that work - would 25% of the sale price just be held by the cra for a period of time and then released, or is it an actual tax and we'll never see that money?

We would not make any capital gains on the sale.

My wife does not work in the US, and has been here less time than myself, and might still be able to be considered a Canadian resident, if so, then as the property is jointly owned, would that mean we would not be subject to witholding tax even though I'm a non resident?

Thank you for any comments.

Fructose · Post by **Fructose** » Sat Apr 28, 2012 9:39 pm

P.S.

The property was our principle residence, and has never been used for rental.

If we were unable to sell it and did rent it out for a couple of years and then sold it, what would the withholding tax situation be then?

nelsona · Post by **nelsona** » Sun Apr 29, 2012 10:21 am

You will have tax calculated at time of sale, which should be minimal, and will only have that much withheld.
There are forms you need to file fbefore and after sale as a non-resident.

Fructose · Post by **Fructose** » Sun Apr 29, 2012 11:41 am

Thankyou

Why do you say the tax would be minimal? After going through some pages while searching for information I thought it was %25 ?

Is it only the capital gains that is subject to tax, rather than the full sale price? (In which case it should be 0 for us if there is no profit made on the sale?)

nelsona · Post by **nelsona** » Mon Apr 30, 2012 7:10 am

Reread what isaid, and get the appropriate forms, and it will become clearer to you.