Taxes: All properties have property taxes are due each year the rate varies in individual communities

Legal Fees: Fees are paid for completing the conveyance and preparing and registering the mortgage. The exact amount of these charges will vary depending on the transaction but they generally range from approximately $1,000.00 to $2,000.00.

Goods and Services Tax GST: GST is a six percent (6%) tax, which applies on the purchase of new construction and on the resale of accommodations, which have been rented out for short-term/nightly rentals. The payment of GST can be deferred if the buyer intends to rent the property out for short-term/nightly rentals and becomes a GST registrant. For more information http://www.cra-arc.gc.ca/menu-e.html

Insurance: Purchasers will be required to arrange insurance on single-family residential accommodations. With respect to condominium-titled properties, the Condominium Corporation insures the building. Purchasers should maintain liability and contents insurance.

Condominium properties and fractional interests: Purchasers will be responsible for paying monthly maintenance charges. The Condominium Corporation is also entitled to levy special assessments for extraordinary expenses, should there not be sufficient money in the contingency reserve fund. Purchasers should determine what rights they have to use the common areas such as parking stalls and lockers, if applicable.

Of Particular note for Nonresidents of Canada: Withholding Tax on Rental Income: Canada Customs and Revenue Agency (CCRA) require nonresidents to pay twenty-five percent (25%) of the gross rental income from the property to CCRA. You may obtain a reduction in such withholding tax if you complete a government form called an NR6 setting out that the projected income and the anticipated expenses associated with the property. Most property managers will assist in the completion of the NR6 return. Upon having filed an NR6 return, you are obligated to file an annual tax return with respect to the property with CCRA. CCRA will only allow expenses to be claimed if the returns are filed and will disallow any expenses incurred more than two years prior to the time of filing the return, it is therefore important that the returns are kept current to avoid expenses being disallowed and tax being paid on the gross rental income.

Time is of the Essence Completing transactions on the designated completion date in Canada is critical. The Vendor has the option of canceling the contract of Purchase and Sale should the funds not be paid on the stipulated completion date and is entitled to retain the deposit. It is not uncommon for Vendors who wish to continue with the transaction to demand interest or additional charges for extensions for late completion.

Canada Customs: Should you intend to furnish your recreational property with personal effects from your home outside Canada, you should contact Canada Customs to determine their requirements to avoid paying duty on the furnishings. Ordinarily you are permitted to transport one shipment of used personal effects to a recreational residence without duty. In order to do so you will have to provide proof at the border of your recent purchase of the property. The purchase document required is the registered Form a Transfer. You can contact our office by telephone to arrange for it to be faxed to you prior to your arrival at the border.

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