Philadelphia Weekly

REAL ESTATE

Tax issues when buying Canadian real estate

U.S. residents often shocked by fees, red tape

By Inman News Feed

Add Comment | Comments: 0 | Posted Jun. 10, 2011

"Most of my American clients understand the process because I give them a document that discusses nonresidents buying in Canada," Warner said. "I give it to them when they are buying, and I give it to them when they are selling. Most understand, but whether they all do, I'm not sure."

In any case, she said, it doesn't deter Americans from buying.

"Rather than grappling with Canadian documentation," she said, "it's easier to get someone else to do that for you, so I hook up clients with an accountant."

Which is something else that Americans should know. They will need an accountant to get that Certificate of Clearance, and they need a lawyer, because there are no escrow companies in Canada. The lawyer will also do the closing documents.

The three most important things a non-Canadian should do before attempting to sell a condo in Whistler, Warner said:

1. Contact a Canadian accountant about the process of applying for a clearance certificate (Certificate of Compliance);

2. Find out what supporting documentation will be required so that it can be prepared and readied; and

3. Understand the lawyers will withhold 25 percent of the sales proceed until this certificate is acquired.

And oh, by the way, Warner also recommends working "with a good Realtor."

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-selling real estate investment book for the Amazon Kindle e-reader.