Costs For Sellers
Includes attending to the execution of documents and discharging of any encumbrances.
Obtaining a Clearance Certificate
You will need a Clearance Certificate from Revenue Canada prior to the completion date of your transaction. The current wait for a Clearance Certificate is 6 to 8 weeks, so it is important to contact your accountant as soon as an accepted offer has been received. Before issuing the Clearance Certificate, Revenue Canada will need to collect any tax payable on the property to be sold.
In Canada, a mortgage is for a fixed term usually between 6 months and 5 years. There are penalties to selling the property before the term of the mortgage is up and are usually the greater of three months' interest or the interest rate differential.
Real Estate Agent's Commission
Goods & Services Tax (GST)
The GST is a 5% tax that, in the case of a vendor, applies to the commission fee and other services related to the sale.
Adjustments for Ownership
This may include taxes, WRA assessment, strata fees
Capital Gains Tax
The rate of the Capital Gain tax is 33.33% of the 'gain'. To determine the adjusted cost base in calculating capital gain, Revenue Canada allows for the following:
- Property Transfer Tax
- Legal fees and disbursements associated with the purchase
- Furnishings and renovations included in the selling price
- A portion of the interest on mortgage payments
- GST fees associated with the purchase
- Revenue Canada does not allow any deductions from the selling price in determining the gain. However, by filing a Canadian tax return with Revenue Canada after the sale, some of the tax paid may be recovered.
Revenue Canada does not allow any deductions from the selling price in determining the gain. However, by filing a Canadian tax return with Revenue Canada after the sale, some of the tax paid may be recovered.
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