Posted on: 02-12-13 15:16:03
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
---
Get the property evaluated, if it is a primary residence. That way you know the price of the place you own on the date of departure.
You lock in your gains at that time. Anything over that value will attract the Capital gains tax. Any losses are at your risk.
You do not have to sell your home to get out of the predicament.
You are allowed to keep your RRSP's also.
Close out all of the Bank accounts, pay off all of your bills and any other outstanding dues. Please get a letter from each of the bank stating that you are closing out the account in GOOD STANDING.
Close out all of your Credit Cards. There are Prepaid Credit cards, still available. Make sure that they can be used all over the world.
Surrender your OHIP and if you are sending by mail send it by courier or by Registered Post. Please retain a few copies for Income tax purposes.
Same goes for Driver's Licence. But get an International Driver's Permit Prior to surrender.
Find some one to rent your Place of residence a month before departure.
Work out all of the details with him and finalize every thing.
FH.
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?
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Some RE Agents are very friendly and helpful too. So, everything will fall in place as per your expectations.
Not all of them are that co-operative. They know that you are desperate in selling your place and there is no male support to the lady who is staying behind. It is a sticky situation. So, you be the jhonny on the spot and decide what it is that you want to do. They will beat you down to pulp, if you are not an astute seller.
If I were you sell it first, without anyone knowing about your departure. Which is NOW. Then move into an apartment, if the need be or get the heck out of here with your stash. AND Good Luck.
FH.
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
http://www.madanca.com" rel="nofollow">LINK
Thanks Full House and Madan!
