Taxes on sold real estate in Canada?

Does anyone have experience with selling primary residence in Canada and moving to another country to live (US in my case)? Do you have to pay taxes in Canada in order to take your money abroad?

I appreciate any advice!

Once a person leaves Canada, he or she is no longer taxable in Canada on non-Canadian income. There are still types of income generated in Canada that they are paying tax on, but in general they are longer subject to worldwide taxation in Canada. What Canada also does is deem individuals to have disposed of certain assets on the date of departure from Canada. Any appreciation that they have on those assets while they were residing in Canada will be subject to a tax. Departure tax is nothing different, it is just income tax that is levied at the time ones ceases to be a resident or departs from Canada.

Thanks Fahim. Are you saying that you have to pay taxes on any appreciation on your primary residence when leaving Canada? That's very unfair since real estate are jumped so much and that is the case whereever you move to. Sure you gain something from your primay residence in Canada but the prices whereever you go to buy are not based on a few years ago. I am wondering how can someone avoid paying this unfair tax?

Any help is really appreciated.

Find yourself a knowledgable financial advisor who would be able to tell you the legal ins and outs of taxation and leaving the country. Advice from an internet forum such as this is no substitute for a professional.

Thanks Reba. Anyone can recommend a good financial advisor in Vancouver area?

actually your lawyer should have filed a T2062 at the time your residence was sold, as your primary residence, you do not have to pay Capital Gains on the $, however, the lawyer does have to keep 25% of the sale price in escrow until the CCRA issues a Compliance Certificate.

I appreciate any advice!

There is a departure tax, as previously pointed out this is a pretty complex area though and you really do specialist advice, have a look at this: http://www.cra-arc.gc.ca/tax/nonresiden ... ing-e.html

The one point I would make is that in most countries, a lot of what constitutes "residency" is based on case law, not statute.

Canada is known as one of the worst in this area because they make every effort to stop their tax revenue from leeching away to the US, and also to stop Canadians who live in the US from claiming Canadian benefits, especially healthcare.

If you want to become non-resident, you really have to go all out to do it, you cannot have even vague links to Canada. One case I've seen mentioned several times is someone who moved to the middle east, still had a valid Ontario DL and their furniture in storage in Ontario, and in court they were ruled to be resident in Canada and had to pay back taxes for several years.

You can still have investments in Canada and a Canadian bank account, but you must make sure these are tied to a foreign address. Canada is especially bad on bank accounts held by non-residents because there is a 10% non-resident tax on any earnings, such as bank interest.

I have been non resident and living in Phoenix for the last 2 years.
I was not able to sell when I left in July 2008 and decided to put it out as a rental property. I have had a tennant for approximately 20 monhs.

I have finally received a offer on my house and plan on selling and I hope to break even. My concern is that the Canadian tax will hold 25% of the value.

Before I complete my 2009 tax return both here in the US and also if required in CA.

I am at a loss as to what to do - and also what do I need to do to get a fair deal from the tax man

Thanks in advance
John

There are 2 forms that need to be filed BEFORE (and just after) the sale, which will calculate the tax withholding that the BUYER will have to withold from you and remit to CRA. It should only be about 1/xxth of the total gains you have on the home, as you will be crdited for all years that it was your principal residence, PLUS one year.

For US you will only be taxable on the depreciation you took over that past 2 year plus a small portion of the total cap gains (not to exceed the gains from the past 2 years).

More on this if you ask at forums.serbinski.com

Thanks - Could you point me to where these forma can be found?