Buying from a non-resident seller

Buyers should be aware that a portion of the sales proceeds must be withheld when buying from a non-resident seller until the non-resident seller obtains a Clearance Certificate from the Canada Revenue Agency. Otherwise, the buyer could be liable for the non-resident seller’s taxes, a potentially huge liability. The amount of the holdback ranges between 25% and 50% of the of the purchase price.

When representing buyers, we will normally obtain a statement from the seller, stating that the seller is a resident of Canada to avoid any potential tax liability for our clients. If the seller is a non-resident, we will make sure that a portion of the sales proceeds is withheld on your behalf until we receive the Clearance Certificate.

Disclaimer

Please remember that the information provided on this website is not legal advice and is intended as general information only. We try to keep this website as accurate and up-to-date as possible but laws, regulations, policies and practice are constantly changing. Please talk to one of our lawyers. Contact us