I was wondering what the cost is calculated if I an from USA citizen selling a cottage in Canada.
If you are a US citizen following in Canada and are selling a Canadian cottage, then you should be aware of the following:
– Your lawyer will hold-back 25% of the gross sales proceeds
– To recover the taxes held-back, file an Application for a Certificate of
Compliance with the CRA
– With the application, submit a check payable to the Receiver General of Canada
for 25% of the capital gain
– The capital gain is calculated as follows: Selling price in excess of the
– Once the application and payment are processed, the CRA will provide you with
a Certificate of Compliance
– Give a copy of the Certificate of Compliance to your lawyer so that you get
the taxes held-back refunded (see step 1)
– File a Section 116 Non-Resident Tax Return to report the capital gain.
Selling costs can be deducted on this return.