What is Overseas Buyer Tax, who needs to pay it, and where to buy a house in Canada only need to pay the 15% overseas buyer tax. However, during actual operation, many people are still confused when encountering specific problems. So we summarized some of the most common cases and give you a detailed analysis in this article.
Case 1: Do I meet the tax refund requirements as long as I study for two years or work for one year after buying a house?
In fact, it is not that simple to understand. Because the tax bureau has strict regulations, that is, before you buy a house, or on the day you hand over the house, you are already a full-time student or have a full-time job, and then after handing over the house, you must have studied full-time for two years or worked full-time. You are eligible to apply for a tax refund after one year.
Case 2: I was a full-time student before buying the house. One year after buying the house, I started working full-time. Do I meet the tax refund requirements?
This situation is unfortunate because you do not meet the tax refund requirements. As we have just mentioned in the first case, the tax bureau has strict regulations. If you were a full-time student before buying a house, you must still be a full-time student two years after handing over the house in order to get a tax refund, or you must be a full-time student before you buy the house. Before you buy the house, you were working full-time. After the house is handed over, you will be eligible for tax refund only if you continue to work full-time for one year. If these two statuses change after you hand over the house, you will not be able to apply for a tax refund.
This situation is quite special, and there are certain risks in applying. It depends on the tax bureau’s decision. If you declared your rent expenses while you owned your home, you may be denied a tax refund because you cannot prove that the home was your primary residence.
Generally, for unfinished properties that are transferred, a 15% overseas buyer's tax is paid based on the final transaction price. When the tax is refunded, the tax will be refunded based on the amount you paid.
Tax refund is not possible in this case. Because once the house is rented out in any form, it will directly lose the tax refund qualification. Everyone needs to pay attention to this.
It will have an impact. Because the tax bureau stipulates that when applying for a tax refund, you need to submit proof of occupancy within 60 days after the date of handover, such as: driver's license change of address proof, changed bank statement, car insurance address change proof, moving receipt, etc. Therefore, it is best to move in within 60 days after handover, and collect and keep the above supporting documents to avoid unnecessary trouble.
If your parents vouch for you and your name is the only one on the real estate certificate, then your possibility of getting a tax refund will not be affected. However, if your parents’ names appear on the real estate certificate, even if the proportion is only For a very small part, there is no way to get a tax refund.
In this case, there is no need to pay, because as long as one of the spouses is a Canadian citizen or a permanent resident, they are exempt from paying the overseas buyer tax.
If the property you buy is for commercial purposes such as office buildings, factories, farms, etc. and is not used for your own residence, then you do not need to pay overseas sellers tax.
If you have received a provincial nomination letter from the Ontario Immigration Bureau before buying a house, you are exempt from paying the 15% Ontario foreign buyer tax. However, if you have already paid it, you can apply for a tax refund after the house is delivered and you obtain permanent residence status.
Case 11: I just graduated and found a full-time job in Toronto, but I have not yet obtained Canadian permanent residence. Recently, my parents I paid a down payment to buy a house for me, can I apply for a tax refund?
In this case, if only your name is written on the real estate certificate, and you can prove that the money paid by your parents is a gift, you can apply for a tax refund.
The 11 common problems mentioned today, I hope they will be helpful to you. If you want to inquire in more detail about overseas buyer tax or other tax issues, please scan our QR code, or call or email us.