Capital gains taxation in Canada: All expats need to know
The real estate industry is one of the most popular and fastest-growing industries worldwide with people from all around the world investing in property for self or sale in different parts of the world, as residents, expats, or non-residents. At present, up until August 2021, the national average home price for a house in Canada is declared as $663, 500, on the basis of the sale pattern and income into most Active Canadian housing markets in greater Vancouver and GTA.
As per the norms of the Canada Revenue Agency, any asset or investment that you buy or make, in order to achieve a profit out of it, is liable for capital gain taxation. In major parts of the world, capital gains taxes are limited to real estate alone. However, at times, certain countries also apply the same Capital gain tax on different investments that can contribute to your income.
Capital Gain Tax: Canada
In Canada, each individual, whether resident or expat, is under the same capital gain tax of 50% of the gain earned. All investments or value of assets that generate income for you are liable under the capital to gain taxation in Canada. As per a Canadian tax consultant service, there is only one way to avoid paying the capital gain tax in Canada and that is in case of unfortunate or tragic death or an unforeseen helpless situation like bankruptcy.
For Expats
For all Canadian expats, you will either be liable to pay the capital gain taxes as per your native country or the country you have resided in for over one year unless you choose to reduce your total earned taxable income with the help of foreign earned income. International tax consultants in Toronto claim that the basic rules of capital gain tax defer as the earned income through different sources like property is subjected to only a 25% tax withholding proposition as opposed to the Canadian residents who benefit from the 50% taxable amount off the gains earned.
According to expats tax consultants in Toronto, the most effective way to avoid the taxation of capital gain in Canada as a resident is to use your capital losses effectively. However, for all non-residents and expats with rental property in Canada, you are subjected to Capital gain tax unless and until the property in question is your primary residence location.
Overall, to conclude, the Canadian government and the revenue agency are very thoughtful about their population, whether residents or non-residents and so try and help out as much as possible. You can choose to seek suggestions and guidance from the top tax consultation service in Toronto to get the right direction. Additionally, you can reach out to international tax consultants in Toronto for non-resident tax-related concerns and questions.
