SELLING
When Americans sell property in Canada, according to Revenue Canada, they must use a notary or lawyer in the province where the property is located. The Canadian government collects 33 percent of the capital gain as a withholding tax.
American residents who sell must also file a Canadian income tax return that year, listing only the capital gain from the sale, seventy-five percent of that amount is taxable at a rate from 17 percent to 29 percent. The withholding tax is credited against any money owed.
The capital gain must also be reported to the internal Revenue Service in America. If the profit has already been taxed in Canada, however, it can be claimed as a foreign tax credit so the money isn't taxed twice.
BUYING
There is no requirement in British Columbia that the purchaser of real property have any particular residency or citizenship.
To occupy residential premises, the non-resident must comply with immigration requirements. These vary depending upon the nationality of the individual involved. U.S. residents are relatively free to occupy residential premises in Canada on a temporary basis. You may wish to check with your nearest Canadian Consulate regarding any residency permits that may apply in the event of an extended stay in Canada. You may also wish to bear in mind the following information:
Property Transfer Tax
The purchase of property in B.C. is subject to a provincial transfer tax amounting to one percent on the first $200,000 and two percent on the balance. Some exemptions apply in the case of Buyers who have not owned property anywhere in the past.
For detailed information, please call me (Graeme Mulski) direct at: 604-984-9711.
Property Taxes
Individual municipalities levy annual property taxes. The actual amount of tax payable depends on a number of factors, the key one being the assessed value of the property as determined by B.C. Assessment, a provincial assessment authority. This is a value set as of July 1 each year and is meant to reflect the market value as of that date.
Citizens may appeal their assessments if they think it is too high. Municipalities then determine the rate of property tax to be levied based on this assessed value. Included in the annual tax notice are school and other taxes, which are set by the school district and other bodies. When considering a particular property, ask what the current property tax amount is... this information is usually readily available.
Goods and Services Tax (GST)
The purchase of a brand new home, as distinct from a resale home, is usually subject to the federal GST. This tax stands at 7% though a partial rebate is normally granted if the buyer plans to live in the home.
Other Taxation Issues
It is recommended that you check with Canada Customs and Revenue Agency and your own taxation authorities as there are significant implications should you earn any income from property in B.C. (e.g., through rents during the period that you own the property, or capital gains when the property is sold). It's also important to note that there may be tax implications when a non-resident property owner dies or when a property is transferred from a person to his or her company or relative, despite the fact that there may be no money paid.
Please Note: If you are using my services to sell or buy property I will be more than happy to put my resources at your disposal as this is a consideration I extend to all my clients. The above information is general in nature.
For more "specific information" regarding taxes, immigration, investment revenue taxation, etc. on properties I do not have a direct interest in....., please contact the Accountant, Lawyer or Financial Advisor or your choice.
In addition, I primarily market the greater VANCOUVER area and will help you in any way that I can or refer you to "trusted" Agents across Canada if you are considering buying in other areas.
I look forward to hearing from you...
Graeme Mulski
Direct: 778-839-8685
Prudential Sussex Realty 24 Hrs/ 7 Days a Week: 604-984-9711 Toll Free (B.C. Only): 1-888-682-9711
