Definition
Under Canadian income tax law, when a non-resident sells Canadian real estate:
**Buyer's obligation**: - Withhold 25% of purchase price (50% for depreciable property, like an income property) - Remit this withholding to CRA within 30 days of transaction date - If buyer doesn't withhold, they may be held liable for the seller's tax owing
**Non-resident seller's obligation**: - Notify CRA of the sale before or as soon as possible after the transaction - Obtain a Compliance Certificate (Form T2062) which reduces withholding to estimated capital gain - With T2062 obtained before closing, withholding can be reduced to 25% of estimated gain (rather than 25% of total price)
**Notary's role**: The Quebec notary is responsible for verifying the seller's residence status and managing the withholding if applicable. A seller who does not disclose their non-resident status exposes the notary to professional risks.