If you own property in Canada but no longer live here, selling it is not as simple as listing it and collecting a cheque. Tax obligations, government paperwork, and long timelines can catch you off guard. And the process takes much longer than most people expect.

I have helped several non-resident clients sell their properties in the Greater Toronto Area, including Oakville, Mississauga, Burlington, and Milton. Most recently, I worked with a client in the United States who found me online and needed to sell their property in Mississauga. We got it done, but it took careful coordination between myself, their accountant, and their lawyer from day one.

If you are a non-resident thinking about selling your Canadian property, here is what you need to know.

The CRA Clearance Certificate: The Biggest Bottleneck

When a non-resident sells property in Canada, the Canada Revenue Agency requires a clearance certificate under Section 116 of the Income Tax Act. This certificate confirms that you have met your Canadian tax obligations on the sale.

Here is the part that surprises most people. You cannot apply for the clearance certificate until you have a firm Agreement of Purchase and Sale. The property needs to sell before you can even start the CRA paperwork.

The CRA says they will send an acknowledgement letter within 45 days. The full assessment can take up to 120 days. That is four months if everything goes perfectly.

In my experience, it takes much longer. One of my clients waited eight months to receive their clearance certificate. Another client, as of today, has waited over nine months and still does not have it. Government processing times are the single biggest bottleneck in this process. There is very little anyone can do to speed it up once the application goes in.

What Happens to Your Money While You Wait

Your lawyer will hold back a significant portion of the sale proceeds until the CRA issues the clearance certificate. Depending on the scenario, this holdback ranges from 35% to 50% of the gross sale price.

That is not 35% to 50% of your profit. It is 35% to 50% of the entire sale price. On a $700,000 property, that could mean $245,000 to $350,000 sitting in a trust account for months.

The holdback comes off the gross sale price, not the equity. If you still carry a mortgage on the property, you may need to cover that payout from other sources. The holdback comes off the top before anything else.

Once the CRA issues the clearance certificate, they calculate the actual tax owing. Your lawyer pays that amount from the holdback and releases the rest to you. In many cases, the actual tax ends up lower than the holdback amount. You may receive a refund after filing your Canadian tax return.

The Foreign Buyer Ban: You Can Sell, But You Cannot Buy Back In

There is another layer worth understanding. Since January 1, 2023, Canada has banned foreign buyers from purchasing residential property. The federal government originally set this ban to expire in 2025, but then extended it to January 1, 2027.

The ban covers residential properties with three or fewer dwelling units in Census Metropolitan Areas and Census Agglomerations. These are areas with a core population of at least 10,000 people. Every community I work in falls under this ban, including Oakville, Mississauga, Burlington, and Milton.

What this means is simple. If you are a non-resident who owns property in these areas, you can sell. But you cannot purchase residential property in these same areas until the ban lifts.

Some exceptions exist for temporary residents with valid work permits, international students who meet certain criteria, and non-Canadians buying with a Canadian spouse or common-law partner. But for most non-residents, the ban applies.

This is one reason some non-resident owners choose to sell now. They want to access their equity. Holding onto property they cannot visit or manage easily, while also being unable to reinvest in the same market, does not always make financial sense.

Why Starting Early Matters

You cannot apply for the clearance certificate until you have a firm sale. That means every other step needs to happen as efficiently as possible. You cannot afford to lose time on things you control when the government timeline is the one thing you cannot.

Here is what that looks like in practice.

Get Your Accountant Ready First

Before you even list the property, connect with an accountant who understands non-resident tax obligations. They need to prepare your Section 116 application and have everything ready to file the moment the sale goes firm. If the property was rented at any point, additional tax filings may need to go in before you can even apply for the clearance certificate.

Work With a Lawyer Who Has Done This Before

You also need a lawyer who has handled non-resident sales. This is not a standard closing. The holdback requirements, the timing of remittances to the CRA, and the coordination with your accountant all need to happen on schedule. Late notification to the CRA carries a penalty of $25 per day, with a minimum of $100 and a maximum of $2,500.

Choose a Realtor Who Knows the Process

And you need a realtor who has worked with non-resident sellers before. Someone who understands the timeline, knows what documentation you will need, and can coordinate with your other professionals so nothing falls through the cracks.

What I Can Help With

I have worked with non-resident clients selling in Oakville, Mississauga, Burlington, and Milton. I understand the process and I know how to work with the accountants and lawyers involved to keep things moving.

My role goes beyond listing and selling the property. I help you plan the entire timeline, from the initial consultation through to the release of your funds. I can also refer you to accountants and lawyers who handle non-resident transactions and Section 116 applications regularly.

The selling part is usually straightforward. The tax compliance and government processing create the real challenge. Having a team that has done this before makes a real difference in how smoothly things go and how quickly you get your money.

Ready to Talk About Selling Your Canadian Property?

If you own property in the GTA and live outside of Canada, I am happy to walk you through the process. Whether you are just starting to think about it or ready to move forward, the sooner we start the conversation, the better positioned you will be.

You can also sign up for my newsletter to stay updated on market conditions in Oakville, Mississauga, Burlington, and Milton.

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This post is for general information purposes only and should not be considered legal or tax advice. Non-resident property sales involve complex tax obligations, and I always recommend working with a qualified accountant and lawyer who can advise on your specific situation.

Can a non-resident sell property in Canada?

Yes. Non-residents are allowed to sell property in Canada, but the process involves additional tax obligations. You will need to apply for a CRA clearance certificate under Section 116 of the Income Tax Act, and your lawyer will hold back 35% to 50% of the gross sale price until that certificate is issued.

How long does the CRA clearance certificate take?

The CRA says it can take up to 120 days, but in practice it often takes much longer. I have had one client wait eight months and another who has been waiting over nine months and is still waiting as of early 2026.

Can I apply for a clearance certificate before my property is sold?

No. You need a firm Agreement of Purchase and Sale in place before you can submit your application to the CRA. That is why it is important to have your accountant and lawyer ready to file the moment the sale is firm so you do not lose any extra time.

How much does the lawyer hold back from the sale?

Depending on the scenario, the holdback ranges from 35% to 50% of the gross sale price. This is not based on your profit. It is based on the full sale price. The funds are held in your lawyer’s trust account until the CRA issues the clearance certificate and calculates the actual tax owing.

Can a non-resident buy property in Canada right now?

Under the Prohibition on the Purchase of Residential Property by Non-Canadians Act, most non-residents are not able to purchase residential property in Census Metropolitan Areas or Census Agglomerations until January 1, 2027. This includes Oakville, Mississauga, Burlington, and Milton. There are some exceptions for temporary residents with work permits and non-Canadians purchasing with a Canadian spouse.