Hello Experts,
Need your clarification on Departure Tax for Non Resident Canadian.
How does it work on Primary Residence/House Sale, I know I have to sell my house if I have to apply for non resident canadian status.
Do I have to pay tax on the sale of my primary residence or is it exempt from 25% departure tax?
Any inputs are highly appreciated!
Thanks
A
Quote:
Originally posted by aditya2007
Hello Experts,
Need your clarification on Departure Tax for Non Resident Canadian.
How does it work on Primary Residence/House Sale, I know I have to sell my house if I have to apply for non resident canadian status.
Thanks
A
Thanks Full House! this is helpful
Also the idea is when I leave Canada my family will be here for couple of months and then my wife will sell the house..... Say within 3 months of my departure....still I have to pay capital gain tax on that 3 months change in value if in case?
Quote:
Originally posted by aditya2007
Also the idea is when I leave Canada my family will be here for couple of months and then my wife will sell the house..... Say within 3 months of my departure....still I have to pay capital gain tax on that 3 months change in value if in case?
Hello,
Forgive me, but I am not sure if it's clear. Are you currently a non-resident? Or you are looking to become one soon?
With regards to becoming a non-resident, this is determine by one's primary and secondary ties. That is what ultimately decides whether you are a resident of Canada for tax purposes. Primary ties are things like home and family. Secondary ties are things like drivers license and social ties. Primary ties alone can determine residency; and secondary ties are viewed on aggregate.
With regards to disposing of a principal residence, it depends largely on your residency status when you dispose of it. If you do it as a non-resident, then you will have to file special returns and the purchaser will be legally required to withhold 25% of the purchase price. In addition, the principal residence exemption calculation may be affected if you were a non-resident when you owned it (as per the T2091).
Sorry for the long-winded response, but there really is a whole list of items to consider when thinking about this. At the end of the day, you should consult a specialist who can analyze all of this based on your specific situation.
More info on principal residences: http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f3/s1-f3-c2-eng.html
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Madan Chartered Accountant team
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Thanks Full House and Madan!
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