All non-residents selling Canadian real estate are required to
undergo the same process. Without proper guidance, it can be a long
and complex process and can result in significant penalties.
Process Theory
Canada has the right under its tax laws, and under most Income
Tax Treaties with other countries, to tax the sale of your Canadian
real estate. Because you are not resident in Canada, the Canada
Revenue Agency ("CRA") wants to ensure it at all times
has sufficient "security" from you to cover your taxes
owing, in case you decide to not comply with the required tax
filings. To do so, the CRA requires the purchaser to withhold 25%
(or 50% in some cases) of the sale price. Though this is not the
final tax owing.
