Luke Giffen
Danny McMullen

Non-Resident of Canada? What to Know Before Selling Your Home

Without the necessary preparation, you could be hit with some serious fees

If you are a non-resident of Canada and are looking to sell a property, you will need to obtain a Certificate of Compliance from the Canada Revenue Agency (CRA) before the sale can be completed. This certificate confirms that you have paid all the taxes that you owe to the Canadian government on the sale of the property.

Before considering the steps in obtaining the certificate, it is important to first consider whether you are deemed to be a non-resident of Canada per the CRA’s guidelines. You may be considered a non-resident of Canada if you did not have significant residential ties with Canada and you lived outside Canada throughout the year or if you stayed in Canada for less than 183 days in the tax year. If you have a unique situation and still aren’t sure, it’s best to contact the CRA directly for guidance. With this is in mind, here are the steps you need to take to obtain the certificate.


  1. Hire a lawyer or accountant: The first step in the process is to hire a lawyer or accountant who is familiar with the Canadian tax laws to help you through the process. They will assist you in preparing the necessary documents and calculating the amount of taxes owed. With a lot of potential fees at play if the application is done outside of the CRA’s timeline, it’s best to take the stress out and ensure the certificate gets completed correctly.
  1. File an application for a Certificate of Compliance: You or your representative (i.e. lawyer, accountant) will need to file an application for a Certificate of Compliance with the CRA. The application includes the T2062 (Request by a Non-Resident of Canada for a Certificate of Compliance Related to the Disposition of Taxable Canadian Property) form, which outlines the details of the sale.
  1. Pay a withholding tax: A withholding tax may be required if the sale of the property is subject to Canadian income tax. The CRA will withhold 25% of the sale proceeds representing the capital gains the seller realizes from the sale of the property until you have paid any taxes that are owed. Importantly, when determining the total withholding tax, the costs associated with selling the property (legal fees, realtor fees), are not a factor.
  1. Receive the Certificate of Compliance: Once the application has been processed and any taxes have been paid, the CRA will issue a Certificate of Compliance. This certificate confirms that you have met your Canadian tax obligations related to the sale of the property.
  1. Provide the certificate to the buyer: The Certificate of Compliance must be provided to the buyer before the sale can be completed in full. The buyer’s lawyer will typically require this certificate as part of the closing documentation.

If you are not able to receive your Certificate of Compliance as of the date of the sale, it is standard practice for your real estate lawyer to withhold 25% of the sale proceeds until the certificate comes back from the CRA. This amount is likely to be a more substantial amount than the 25% of the capital gains withheld through filing the T2062 form, so it is important to be well prepared. If the T2062 form is not filed within 10 days of closing, there is a late filing fee of $25 per day with a minimum of $100 and up to a maximum of $2,500 per non-resident owner as per subsection of 162(7) of the Income Tax Act.  The process of obtaining a Certificate of Compliance can take several weeks or even months, so it’s a good practice to begin to prepare the application long before the closing date.


If you have any questions regarding your specific sale as a non-resident, please reach out and we would be happy to help you!