In order to ensure fairness and avoid tax evasion by non-tax residents that cannot be traced, the tax law stipulates that when any non-tax resident sells a personal investment property in Canada
The lawyer first needs to withhold 25% of the sales price of the property, and within 10 days at the latest after the handover of the house, apply for a tax clearance certificate certificate of compliance from the tax bureau through an accountant, which is used to approve the tax arising from the sale of the house. net income. Once approved, the attorney will refund the remaining portion of the previously withheld amount. If you have more than one property to deal with, you will need to submit separate tax clearance applications.
However, this does not mean that the tax bureau treats non-tax residents as random leeks. Considering that there will be expenses such as attorney fees after the property is handed over, the seller can declare the fees to the tax bureau again before April 30 of the next year after the property is handed over and sold, to further reduce the net income and obtain a tax refund. However, the application takes time, and the tax clearance certificate can take up to three months at the fastest. Coupled with various reviews and calculations, the entire process from selling the house to finally receiving the tax refund is conservatively estimated to take at least one and a half years.
If you do not submit an application in accordance with the rules to save trouble, you will be fined $25 per day, with a minimum fine of $100, and a maximum fine of $2,500 a year. At the same time, due to tax law regulations, if you buy a house from a non-tax resident who does not have a tax clearance certificate, the buyer will bear all possible taxes. In other words, without a tax clearance certificate, generally no one will dare to pick you up. plate.
Indeed, due to its large size, the system will appear clumsy during operation. But every step has its own significance. It is to serve more ordinary people more fairly and justly, and is finalized after discussions by all parties. Stepping out of the victim's perspective and changing your thinking, it is not difficult to find that following the rules step by step, although it may be a long way around visually, is actually the most time-saving, labor-intensive and money-saving way.
