What happens if Form T2062C is filed after closing?
The notification is still made, and it is still the document that evidences the treaty position on the disposition. Filing it late does not remove the obligation and does not make the exemption unavailable. What it does is leave a gap, and during that gap the purchaser carries the exposure: without the comfort the process is designed to give, a prudent buyer holds back part of the proceeds and remits it. Recovering that is a separate piece of work on its own timetable. So a late notification is usually dealt with alongside the question of what has already been withheld and how it comes back.
Does a treaty exemption mean I can skip the notification?
No. The treaty decides what tax is due; it does not decide what has to be filed, and the notification is the document that puts the exemption on the record. Leave it out and the buyer has nothing to rely on, so their advisers do the safe thing and hold back part of the price. From their side the reasoning is sound, because it is the purchaser's own liability that bites if the seller's analysis turns out to be wrong. A seller who is entirely confident in the treaty position and files nothing has given the buyer no comfort at all, which is why the file that looks as though it needs no work is the one that comes apart at completion.
Can I recover withholding the buyer has already remitted?
Usually, yes, but by a different route from the one that would have prevented it. Once an amount is remitted it is held against the seller's position and comes back through a filing that establishes what the actual liability was, which on a treaty-protected disposition may be nothing at all. That is a return, on the return timetable, rather than a correction at the closing table. The practical consequence is delay: the funds sit with the revenue authority until the position is filed and processed. Getting the notification in first is a great deal cheaper than recovering the money afterwards.
Does the late filing penalty apply when no tax is owed?
The general late-filing penalty is computed on the balance owing. For the 2025 tax year it is five per cent of that balance, plus one per cent of it for each full month the return is late, to a maximum of twelve months. Where the CRA issued a demand to file and charged a late-filing penalty in any of the three preceding tax years, it is ten per cent plus two per cent for each full month, to a maximum of twenty months. Where the treaty position holds and the balance is nil, that calculation produces nothing, which is why the real exposure on a section 116 file is the withholding and the delay in recovering it.
Why does my solicitor want the notification before completion?
Because the purchaser's own liability is what the process protects. Until something evidences the seller's position, the buyer is the one the revenue authority looks to, and the usual answer is to hold back part of the price and remit it. A solicitor asking for the paperwork ahead of completion is managing their client's exposure, not being difficult. The seller's interest points the same way: the money withheld is the seller's money, and it is far easier to keep it than to get it back once it has been remitted and the file has moved on.
I sold years ago and never filed the notification, what now?
It is handled as a historic file rather than a live transaction, and the order of work changes. First the treaty position is established on the facts as they stood at the disposition, with the evidence that existed then. Then the notification is made, explaining the delay rather than glossing over it. Then, if an amount was withheld and remitted at the time, the filing that recovers it is prepared for the right year. Old files are usually recoverable. What makes them harder is that the documents the analysis depends on sit with a lawyer who closed the matter long ago.
Is the sale of foreign property taxable where I live?
For a resident, yes — worldwide gains are taxable, and the gain is computed in your own currency, so the exchange rate at purchase and at sale changes the number even when the local-currency price did not move. The country where the property sits usually taxes it too, often with a withholding or clearance step before closing, and that tax becomes a credit. A principal residence relief may apply to a home abroad on the same terms as one at home. See principal residence and foreign property.
Can I avoid capital gains tax on a foreign property?
Not by virtue of it being foreign — there is no exemption for that, and the "keep it offshore" advice you may have read is how people acquire penalties rather than savings. What genuinely reduces the gain is ordinary and legitimate: principal residence relief where the property qualifies and the designation is made correctly, a properly built cost base including acquisition costs and capital improvements, the timing of the disposition, the treaty rules for real property, and credit for the foreign tax paid. See principal residence and foreign property.
