Checklist for Non-Residents: Acquiring a Certificate of Compliance for Selling Canadian Property

If you’re a non-resident of Canada planning to sell taxable Canadian property, obtaining a Certificate of Compliance from the Canada Revenue Agency (CRA) is crucial. This certificate ensures that you meet all tax obligations related to the sale and helps prevent delays in the transaction process. At GTA Accounting, we simplify this process by assisting non-residents to gather the necessary information and handle the application on their behalf.

Here’s what you need to know and the key steps in acquiring a Certificate of Compliance.

Identifying the Seller

The first step in the process is identifying the seller. As the non-resident selling the property, we must collect vital personal details, including your full legal name, date of birth, passport number, and Social Insurance Number (SIN) or Individual Tax Number (ITN). These details ensure that your identity is apparent in all documents submitted to the CRA. We also require your current address and contact information for efficient communication.

For more information, refer to the CRA guidelines for Non-Residents and Taxable Canadian Property.

Providing Property Information

The next step involves gathering all relevant information about the property you are selling. This includes the full address, date of acquisition, the original purchase price, and the estimated or actual selling price. You'll also need to provide a copy of the purchase agreement, title deed, and any records of improvements or renovations made to the property.

These details allow us to calculate the capital gains on the sale accurately, which forms the basis for the tax payable.

Supplying the Sale Agreement

We need proof of the sale or pending transaction to proceed with the application for a Certificate of Compliance. This usually involves submitting a copy of the sale agreement or offer to purchase, along with details about any deposits received. Having this documentation ready ensures we can start the process promptly, allowing us to meet deadlines and avoid potential sales delays.

For more details on the process, check the CRA’s Guide on the Certificate of Compliance.

Information About the Buyer

In addition to your details, the CRA requires information about the buyer of your property. This includes the buyer’s full name, contact details, and address. If possible, having the buyer’s CRA tax identification number will further streamline the application process. Accurate buyer information is critical because the CRA uses this data to ensure that both parties fulfill their tax obligations.

Handling Withholding Tax Obligations

As a non-resident selling property in Canada, you're subject to withholding tax, typically calculated as 25% of the capital gains from the sale. We help calculate this withholding tax based on the sale price, purchase price, and other relevant expenses. If tax credits or exemptions are available, we ensure they are applied correctly to reduce your tax liability.

Refer to the CRA’s Guidelines on Withholding Tax for Non-Residents for withholding tax regulations.

Documenting Expenses Related to the Sale

Any expenses incurred during the sale process can reduce the property's capital gains, lowering your tax obligation. These expenses may include legal fees, realtor commissions, transfer taxes, and any repair or staging costs associated with the sale. By providing documentation of these costs, you can offset a portion of your tax liability, which is why having a record of these expenses is essential.

Obtaining a Canadian Tax Number

If you don’t already have a Canadian tax number, such as an ITN or SIN, you'll need one to complete the Certificate of Compliance application. GTA Accounting can assist you with this process and ensure you have the correct identification numbers for all tax filings and documentation.

Learn more about how to apply for an Individual Tax Number (ITN) from the CRA.

Additional Requirements for Depreciable Property

If the property being sold is classified as depreciable—such as a rental property or business asset—additional documentation may be necessary. This includes records of capital cost allowance (CCA) claimed over the years and details about the property’s depreciable class. Providing this information allows us to calculate any potential recapture of depreciation that may apply to the sale.

Authorizing GTA Accounting as Your Representative

To streamline the process and ensure all communications with the CRA go through a trusted source, you can authorize GTA Accounting to represent you. This is done by completing and submitting Form T1013, which gives us the legal authority to act on your behalf during the application process.

To authorize a representative, refer to the CRA’s Form T1013.

Timelines and Final Steps

It’s essential to apply for a Certificate of Compliance before the closing date of the sale. Ideally, the application should be submitted at least 30 days before the transaction is finalized to avoid delays. After submitting the necessary documents to the CRA, we follow up regularly to ensure the certificate is issued promptly. Once it’s issued, the buyer can release the funds withheld for the tax payment.

Why Work with GTA Accounting?

Navigating the Canadian tax system as a non-resident can be complicated, especially when selling property. At GTA Accounting, our experienced professionals are here to make the process smooth and stress-free. From collecting essential documents to calculating withholding tax, we handle all the details so you can confidently complete your sale.

If you’re a non-resident looking to sell taxable Canadian property, contact GTA Accounting today to get started on acquiring your Certificate of Compliance. We’ll guide you every step of the way and ensure that your tax obligations are met accurately and efficiently.