What do I have to file when I sell Canadian property as a non-resident?
Two distinct filings, and they answer different questions. The first is the notification of the disposition, which goes in on a short clock that runs from closing and asks the CRA to certify the transaction; the certificate it produces is what releases the holdback the buyer is sitting on. The second is the Canadian return for the year of the sale, which reports the gain itself and settles the tax. People often assume the certificate is the end of it. It is not. The certificate deals with the holdback, the return deals with the liability, and any amount remitted through the first is credited against the second. Missing either leaves the file open.
Is the holdback taken on my gain or on the whole sale price?
On the price, in effect, and that is the whole difficulty. The buyer holds back a portion of what they are paying you, measured against the sale proceeds, and they hold it because they are personally liable if it is released without the certificate. The certificate itself is computed on the gain: proceeds less your cost base and the costs of selling. Where a property has been held a long time, or where the cost base includes substantial improvements, the gain is a fraction of the price, so the holdback routinely exceeds the tax that will eventually be due. The application, with cost-base evidence behind it, is what reconciles the two.
What cost-base evidence has to go in with the application?
Everything that proves what the property cost you and what you spent on it. In practice that means the purchase documents and the closing statement from when you bought, the statement of adjustments from the sale, and receipts for capital improvements such as a new roof, an addition or a rewiring, kept separate from ordinary repairs, which do not go into the cost base. If the property was ever your residence, or was let at some point, that history matters too, because it affects how the gain is computed. The application is decided on documents. A cost base asserted without support is what holds the certificate up while the questions go back and forth.
Do I also file a Canadian return for the year of the sale?
Yes. The certificate and the return are separate obligations. The certificate settles what is released from the holdback; the return for the year of the sale reports the disposition, computes the gain against your cost base and selling costs, and produces the final tax figure. Any amount remitted in connection with the certificate is credited there. In a good many files the return is the point at which the rest of the money comes back, because the holdback was measured against the proceeds while the tax is measured against the gain. Filing the return also closes the year cleanly, which matters if you hold other Canadian property.
Do both owners on title file their own application?
Where two people are on title, each of them has disposed of their own interest, and each files an application for their own share. It is a point that gets missed on jointly held holiday properties and on homes left in joint names after a move abroad. The proportions have to match how title was actually held and how the purchase was funded, not how the couple think of the property. We prepare the applications in parallel so that the cost base, the improvement history and the selling costs are split consistently across them. Inconsistent halves invite questions, and questions delay the certificate, which keeps the holdback in the lawyer’s trust account.
Who actually notifies the CRA — me, my lawyer or the buyer?
The vendor’s obligation is the vendor’s, even though the practical work usually runs through the lawyers. You, as the non-resident seller, are the one who has to notify the CRA of the disposition, within the short window that starts at closing. The buyer’s side has an independent worry: the buyer is personally liable if the holdback is released without a certificate, so their lawyer will hold the money whatever you say. That is why the two sides are not really negotiating. The useful thing to do before closing is to agree in writing how the holdback will be held and what will release it, and to have the cost-base documents assembled before the clock starts.
Is a gift from abroad taxable in Canada?
Not to the person receiving it — Canada does not tax gifts in the recipient's hands, whatever the amount. The tax questions sit elsewhere. A gift of property rather than cash is a disposition for the giver, at market value. Attribution rules can send the income the gift later earns back to the giver where the recipient is a spouse or a minor. And a gift large enough to be noticed should be documented, because "it was a gift" is a claim that gets tested. See a Canadian receiving a foreign gift.
How are non-residents taxed on Canadian rental income?
By default the payer or agent withholds a flat rate on the gross rent and remits it, with no deduction for mortgage interest, taxes or repairs. Electing under section 216 lets you file on the net rental result instead, which for most properties recovers a substantial part of what was withheld; an NR6 undertaking filed before the year starts lets the withholding itself be computed on net rather than gross. See the section 216 return.
