A Guide to Canadian Real Estate Tax Payments

When the global housing market was going through some tough times in the recent past Canadian real estate market was enjoying a decent growth with impressive sale figures and pleasing property prices. The real estate sectors in major economies like the United States, Eurozone, Japan, etc. have declined considerably for the past several years especially after the Great Recession of 2007-08 in which the world came across a global economic decline. However the Canadian real estate market remained majorly invulnerable to this event and continued to grow and expand further.

Experts believe that the golden era of prosperity and success of the real estate sector will continue for the year 2013 as well if investors maintains precision in their investment. Buying property in Canada is profitable when you possess a better understanding of the Canadian tax laws that are applicable under real estate investments. It is not necessary for investors to be a Canadian citizens for making investments in the property sector. Immigrants who are willing to invest in Canadian properties can buy assets on a temporary basis by fulfilling certain immigration criteria.  Immigrants eager to invest in rental properties can do it by first applying for annual tax returns with CRA (Canadian Revenue Agency). 

Moreover when you buy property in Canada you will have to pay provincial property tax that differs from province to province. Federal Goods and Service Tax (GST) is levied on new home purchases and is not applicable on the resale of properties.  While selling back property, Canadian government takes 50% of any withholding tax from non-residential sellers. Besides immigrants need to provide a clearance certificate issued by the CRA, and the buyers will be personally responsible for any unpaid taxes of the seller. Canadian residents are not taxed on gains and profits incurred from selling properties. 

There are several other province and locations specific laws which are quite substantial and flexible directed to make real estate investment easy and profitable for investors. However for the successful running of property investments, investors must be aware of the all the rules and legal guidelines and act accordingly. Investor must also gain knowledge on the numerous tax implications during the various phases of property investment from buying to renting or inhibiting, and finally selling of the property.