Foreign Sellers And Potential Purchaser Tax Liability

As with the purchase and sale of most things these days, the buying or selling of a home involves the payment of tax.  Not only are real estate transactions subject to land transfer tax and sometimes HST (harmonized sales tax), but there can also be income tax implications if the value of the home has increased while the seller owned the property.  Ordinarily, that income tax liability is the responsibility of the seller, but it can also be the responsibility of the purchaser as well. 

More specifically, where the seller of the property is a non-resident and the seller does not fulfill their income tax obligations, the buyer can become liable for the payment of the income tax if certain precautions are not taken.