I closed on my Canadian property and never notified the CRA, what now?
Treat it as two separate things. The notification and clearance process runs on a short clock from closing, and that is the piece that has gone wrong. The return reporting the disposition for the year is a separate filing with its own deadline. Both need attention, and the work usually starts with establishing the actual gain, because that figure drives every conversation that follows: with the CRA, with the purchaser, and with whoever is holding funds. Late filing of the return carries, for the 2025 tax year, 5% of the balance owing plus 1% for each full month it is outstanding, to a maximum of 12 months.
Is there a penalty for filing T2062 late, or just the withholding?
The application is not a return, so the percentage late-filing penalty that applies to returns is not what you face on the application itself. The exposure on late notification is charged by reference to the form and the delay rather than to the tax, which is why a disposition with little or no gain can still be expensive to have handled late. Separately, the return for the year of disposition does attract the ordinary late-filing penalty if it goes in late. Two exposures, two remedies, and do not let a quote for one be presented to you as the whole.
The buyer is threatening to keep my holdback, can they?
The holdback is not theirs to keep, and it is not theirs to release early either. The purchaser is personally liable if funds are let go before the certificate issues, which is exactly why a lawyer will sit on the money rather than take a view on it. That is frustrating when the closing has already happened, but the pressure is misdirected. What moves the money is the CRA's response to the application. Getting that application in, complete and supported, is what releases it, and chasing the purchaser is not a substitute for doing so.
Do I have to file a Canadian tax return as well as the clearance application?
In the ordinary case yes, and they are not alternatives. The clearance application deals with the disposition at the point of sale and with the purchaser's retention. The return reports the disposition for the year, computes the tax on the gain and credits whatever was remitted on your behalf. It is the return that produces a refund where the amount retained exceeded the tax, which is a common outcome on a property that held its value rather than soared. Missing the return is how a seller ends up holding a clearance certificate with money still sitting at the CRA.
Will the penalty be calculated on my sale price or on my gain?
The late-filing penalty on the return is calculated on the balance owing, and that comes from the tax on the gain rather than from the price the property sold for. For the 2025 tax year it is 5% of that balance plus 1% for each full month the return is late, capped at 12 months, and it does not compound. Where the amount retained at closing covers the tax, the balance owing can be small or nil, and a percentage of nil is nil. Interest is a separate charge and it compounds daily on any unpaid amount.
Can the CRA charge a higher penalty because I filed late once before?
There is a heavier rate, but filing late twice is not by itself what triggers it. Two things must both have happened: the CRA issued a demand that you file, and it charged a late-filing penalty in any of the three preceding tax years. Where both are true, the rate for the 2025 tax year becomes 10% of the balance owing plus 2% for each full month, to a maximum of 20 months. Where they are not, the ordinary rate applies however poor you feel your record looks. Check the CRA's own account history before accepting a figure from anybody.
Do non-residents pay US estate tax?
Yes, on US-situs assets — and with a far smaller exemption than a US citizen or domiciliary receives, which is why exposure can arise at values people assume are safe. US real property, tangible property located there and shares issued by US companies are generally in; foreign-issued securities and certain deposits generally are not. An estate tax treaty, where one exists, can improve the position considerably. See US estate tax for non-resident aliens.
How do I report the sale of a foreign property?
On your residence-country return, as a disposition, with proceeds and cost base converted at the rates for their own dates. Separately, the country where the property sits may require its own return and may hold back tax at closing until a clearance or certificate is issued — Canada does this for a non-resident vendor, and the United States withholds on a foreign seller of US real property. Those steps have their own deadlines, often before closing. See clearance certificates on a property sale.
