The sale would be subject to a 25% holdback of the sale price until CRA issues a Clearance Certificate. If the property has been a revenue-generating property, the holdback would be 25% of the land and 50% of the improvements. It can take 4 months to have a Clearance Certificate issued, so accountants should start on the paperwork as soon as there is a firm deal in place to sell the property. If the Certificate has not been issued by the last day of the month following the month in which the transaction completed, the holdback funds must be remitted to CRA. However, an accountant can request something called a “comfort letter” from CRA which confirms that they are working on the application and that the holdback may continue to be held by your notary/lawyer until they determine the amount, if any, which is required to be paid.
Pacific Station Notary – Nanaimo Notaries
