We are often approached by non-residents of Canada who want to sell their Toronto condos or houses. While much of the selling process is the same for non-residents as it is for residents, there are a few important things to keep in mind:
Hiring a REALTOR
If you don’t live in Toronto, the REALTOR you choose to work with will largely be responsible for the success or failure of your sale. When hiring your real estate agent, look for an agent who has experience servicing non-resident Sellers. In particular, keep in mind:
- Communication – Make sure to choose an agent who will communicate with you on your schedule or time zone and in your preferred communication method (e.g.,. email, Skype, text, etc.).
- Local Market Knowledge – The Greater Toronto Area (GTA) covers many neighbourhoods and cities, each with their own real estate market intricacies. Local market knowledge is critical to selling your property for top dollar. A real estate agent who works primarily in Mississauga or Ajax for example likely isn’t the best candidate to sell your downtown Toronto condo and vice versa. We have a network of preferred REALTORS across the GTA and Ontario to assist our non-resident clients with selling their properties.
- What Services They Offer – As a non-resident, you’ll be relying on your REALTOR’s expertise and network of contacts to prepare and stage your property. Make sure you know what services are available and included in the commission.
- Use of Technology – Video, Skype, electronic signatures and digital document sharing are some of the tools that we use to facilitate property sales with non-residents of Canada. Technology can greatly simplify the sales process.
To sell your Toronto property, you’ll also need a real estate lawyer. Most agents can recommend a good lawyer – one who is experienced with non-residents will make the process much more efficient.
Costs to Sell and Taxes
We put together a comprehensive list of the expenses you should be prepared to pay to sell your Toronto property. You can access that list here.
In addition, as a non-resident, there will be tax implications to consider.
According to the Canada Revenue Agency (CRA), you are considered a non-resident of Canada if you:
- normally, customarily, or routinely live in another country and are not considered a resident of Canada; or
- do not have significant residential ties in Canada; and
- you live outside Canada throughout the tax year; or
- you stay in Canada for less than 183 days in the tax year.
Note: there are a few other exceptions listed on the CRA website.
As a non-resident, it’s important that you speak to an accountant about how your Canadian real estate will be taxed. The following serves as a guideline only.
In most cases, non-residents are subject to tax on any income or gains resulting from the sale of a taxable Canadian property, including residential homes, condos, vacation properties or land. When a non-Canadian resident sells a property, the Buyer of the property must withhold and remit a portion of the purchase price to the Canada Revenue Agency (CRA). Generally this amount is 25% of the gross selling price.
Alternatively, a Certificate of Compliance related to the sale of the property can be filed and approved by the CRA to reduce or eliminate the withholding taxes. Upon filing of this Certificate of Compliance, the 25% withholding tax required is calculated on the gross sales proceeds net of the purchase cost of the property (or in other words, the net profit).
Also, non-residents are required to file a Canadian tax return by April 30 following the year they sold their property. Generally, upon filing a tax return, part of the withholding tax is refunded to the Seller as the 25% withholding tax is usually a lot higher than the actual taxes owing. At this point, you can also claim expenses like legal fees and commissions against the income from the sale.
Questions? Want More Information?
We’d be happy to answer any questions you have about selling your Toronto property. We can be reached by Skype, email or text.
To read more about selling your Toronto property, see one of our other Seller Guides: