I am acting for a Seller who has now become a Non Resident. It is a principal residence, so, no capital gains will apply. How do I do calculate the amount?
It’s not simply capital gains taxes, it is all taxes. The obligation is to withhold 25% of the entire purchase price, not just the Seller’s equity, or any specific amount that might be payable with respect to this particular house. It applies to ALL Taxes that may be owed.
The fortunate aspect of this is that the Income Tax Act provides that all contracts are deemed to be amended to permit this deduction and remission, whether they say so, or not. The Seller’s consent is not required or necessary.
This provision is included in the standard OREA APS, but agents need to know how to calculate the amount and make inquiries about the status of the Seller.
Brian Madigan LL.B., Broker