Bringing in property sale proceeds from abroad

[czar2013]

Hi seekr

Just stumbled upon this informative post - was wondering how was your experience and if you can be of similar to help to me ?

Thanks hobbes. Will call CRA to clarify.

Does anyone have an answer to the following question:
2. If I need to pay taxes in Canada, what is the basis for the value of the house? I have read that the base value of the house is the value when I became a "resident". Is that the date I originally came to Canada(2010) or the date of landing(2013)?

Also another question (India tax related)
6. When I sell property in India, what is it that I am paying tax for as an NRI? My understanding was I would calculate my capital gain (selling price - indexed price of property= capital gain) and pay 20% on the capital gain. However I heard of someone who had to pay 20.6% TDS on the whole sale amount (at the time of the sale, which was a few weeks back), which I think is a mistake. What is right?

 

[czar2013]

Hi - quite a few of my questions got answered however looking at the following help if anybody can. @steaky or @seekr ?

Scenario

- I bought an under construction house abroad (in India) in 2011, and the offer of possession given to me in 2014
- I arrived in Canada in 2013 as a PR.
- I am thinking of selling the house abroad now and bringing money to Canada via some money transfer service. the current market value is about 180K.
- I will be paying capital gain taxes in my home country, when I file my taxes
- There is no rental income from the property as I said and it’s been a personal property


Questions:

1) Reading the previous post from Seekr & commented by you as well – Since it was Personal Property and I didn’t report in my early 2014-2017 taxes it’s OK. ?
2) So if that’s the case – should I declare and say “Yes” in 2018 return? I’m guessing NO, since it’s still a personal property. Or should I still say “Yes” and declare atleast…(confused)
3) Would you know anything regarding India Capital Gain tax calculation? How will the date of purchase decided, will it be date of allotment when I paid initial payment to builder? Or date of offer of possession after 3 yrs when house was ready?
4) From the posts I understood that the capital gain tax you would pay in home country, when you bring back money here in CA and file return here the CRA will refund you back that home country tax, true? Will show that tax amount under costs and reduce my gains OR don’t show under costs and later claim as refund?

 

[airwick]

Hi,
What if the foreign property was owned by a married couple, and that the property's value was 100k. Does one of the couple declare the value in tax return, or is there no need to declare it since each one only owns 50k.
Thanks!

 

[steaky]

Hi,
What if the foreign property was owned by a married couple, and that the property's value was 100k. Does one of the couple declare the value in tax return, or is there no need to declare it since each one only owns 50k.
Thanks!

If both of them have other foreign assets which cost is over 50k, then they need to declare it.

 

[mirko_81]

No, regardless profit or loss, you still need to declare your foreign property value $100K of more.

If you declare for a loss, you will have net capital loss for that year. You can use your unused net capital losses to reduce any taxable capital gains in the future.

Hello - just wanted to give updates on this discussion after I finally managed to ask the CRA about it (via phone).
So, in short, if there is no profit/gain from the property, you should not declare any T1135.
If you decide to sell at a certain point, that should be declared in your "gain" section.

Hope it helps.

 

[Tarun401]

Hi All,
I have question (specific to India) on this topic:
1. Being in Canada, which bank account can we deposit the property sale proceeds?? The info I have gathered so far, we can only deposit the sale proceeds to NRO account (that too with certain condition)
2. What are the available legal options to transfer the funds from Indian bank account (i.e. NRO) to Canadian bank account.
3. Are we supposed to pay both:
-- TDS (buyer will deduct and directly pay to Govt) Not sure about the % though
-- 20% Capital Gain Tax

 

[RUMEYA]

to declare Fair market value of property owned abroad in first year tax return in Canada, how to compute FMV. Please help

 

[steaky]

to declare Fair market value of property owned abroad in first year tax return in Canada, how to compute FMV. Please help

Are there any real estate surveryors who can give you a valuation fo your property?

 

[Alex54321]

Hi,
What if the foreign property was owned by a married couple, and that the property's value was 100k. Does one of the couple declare the value in tax return, or is there no need to declare it since each one only owns 50k.
Thanks!

Similar question, but with a twist.

What if the foreign property was owned by a married couple ( value more than 100K), but before landing the wife ( future PR) is not on the property Title anymore (using the Quitclaim Deed), so the wife who is about to be landed does not own the foreign property. The Property owner is husband who is non-resident of Canada and continue to live and work out of Canada and occupy that property.

I assume that the wife (PR) is not reporting that property anywhere, please confirm.

 

[steaky]

Similar question, but with a twist.

What if the foreign property was owned by a married couple ( value more than 100K), but before landing the wife ( future PR) is not on the property Title anymore (using the Quitclaim Deed), so the wife who is about to be landed does not own the foreign property. The Property owner is husband who is non-resident of Canada and continue to live and work out of Canada and occupy that property.

I assume that the wife (PR) is not reporting that property anywhere, please confirm.

Assume the wife just land and return to home country almost immediately, the wife wouldn't need to report anything even if she's still in title.

 

[Alex54321]

Assume the wife just land and return to home country almost immediately, the wife wouldn't need to report anything even if she's still in title.

The things are a bit complicated, for her it's one way street, she cannot return back to US (maybe can - after 10 years) and possibilities are that we will sell our US property AFTER her landing in order to use proceeds to pay for the new home in Canada. That's why I am entertaining scenario where we take her name off the Deed before landing.

 

[xylene]

I had some similar questions
1. If my property value is less than 100K I do not have to declare it correct? Based on this : https://turbotax.intuit.ca/tips/declaring-foreign-property-on-your-tax-return-6217
2. However now as of 2016, CRA made this change that T1135 should report under 250K as well https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1135.html (Does this mean greater than 100k but less than 250k ?? )
3. I did not declare because it was under 100K and still under 100K
4. Another question on ancestral property, I don't own it yet, my father passed away 4 years ago and his property would go to mom, brother and me. When should I start declaring this? We just a succession certificate and haven't changed the Title of the document yet. This is over 250K based on current market value.

 

[AussieCanuck2017]

This is all so complicated! I am a Canadian citizen living working in the USA and my husband applied for PR. We do not have our approval yet, Should we try to sell our house before the approval to save on capital gains? Or does he have to land first and be verified for it to be considered Canadian revenue. We plan on selling but were hoping to wait until approved status. Need advice because we do not want to pay capital gains in both countries!

 

[steaky]

This is all so complicated! I am a Canadian citizen living working in the USA and my husband applied for PR. We do not have our approval yet, Should we try to sell our house before the approval to save on capital gains? Or does he have to land first and be verified for it to be considered Canadian revenue. We plan on selling but were hoping to wait until approved status. Need advice because we do not want to pay capital gains in both countries!

Approval of what? USA green card or Canadian PR?

 

[Alex54321]

Approval of what? USA green card or Canadian PR?

"...Should we try to sell our house before the approval to save on capital gains? "-- approval of PR does not mean anything from taxation point of view. As I understand, the PR becomes a resident of Canada for taxation purposes on the day of landing, assuming that day is a "hard" landing. And you, the Sponsor, will become a resident of Canada ( as far as taxation) on a day of your return to Canada.

"...we do not want to pay capital gains in both countries!" - do not forget that as far as US taxation you can exclude $250,000 of your profit from the sale of your home if you are single and $500,000 of the profit if you’re filing taxes jointly as a married couple. However, you do have to meet specific requirements to claim this exclusion:

• The home must be your primary residence.
• You must have owned the home for at least two years.
• You must have lived in the home for at least two of the past five years.

Are you expecting to have $500,000 or more in capital gains from the sale? Maybe not, so do not worry about US.