Cross-Border Real Estate Can Be Complicated, But It Doesn’t Have to Be

If you're a U.S. citizen selling property in Ontario, there are a few extra steps involved to make sure everything goes smoothly, especially when it comes to taxes. As a local Manitoulin Island Real Estate Brokerage with cross-border experience, We often help U.S. sellers navigate this process with confidence and peace of mind.

Below is a step-by-step overview of what to expect when selling Canadian real estate as a non-resident of Canada. Whether you're selling a cottage, investment property, or inherited land, having the right information — and team — can make all the difference.

Step-by-Step: Selling Ontario Property as a U.S. Citizen

1. Accept an Offer and Sign the Purchase Agreement

Once you accept an offer from a buyer, the Agreement of Purchase and Sale (APS) will be signed. For non-residents, we recommend allowing 60–90 days for closing to give time for Canadian tax compliance paperwork.

2. Hire a Canadian Real Estate Lawyer

You’ll need a lawyer licensed in Ontario to:

• Handle the legal paperwork

• Coordinate with CRA (Canada Revenue Agency)

• Prepare the Statement of Adjustments

• Manage funds and disbursements after closing

Choose a lawyer experienced with non-resident sales to avoid surprises.

3. Apply for a CRA Certificate of Compliance (Form T2062)

This is a crucial step. As a non-resident, you must apply for this certificate to calculate and potentially reduce the amount of Canadian tax withheld on your sale.

You’ll need:

• Form T2062 (application for the certificate)

• Proof of original purchase price (to calculate capital gains)

• Copy of the sale agreement

• A Canadian Tax Identification Number (ITN) — if you don’t have one, apply with Form T1261

Processing can take 6–12 weeks. Apply early to avoid delays or excess tax withholding.

4. CRA Reviews and Issues a Withholding Amount

If the certificate is ready before closing, CRA will direct your lawyer to withhold 25% of the capital gain (not the full sale price).

If the certificate isn’t ready yet, the buyer’s lawyer must withhold 25% of the full sale price and send it to CRA, unless your lawyer arranges a holdback in trust while waiting for the certificate.

5. Closing Day

On the day of closing, your lawyer will:

• Discharge any existing mortgage

• Pay commissions and closing costs

• Adjust for prepaid taxes and fees

• Handle tax withholdings or holdbacks

• Wire the net proceeds to your U.S. bank account

6. After Closing: Final Reporting and Repatriation

Your lawyer will send a full package of closing documents, tax forms, and receipts for your records.

You may want to use a currency conversion service to exchange Canadian funds to U.S. dollars at better rates than most banks offer.

7. U.S. Tax Filing

As a U.S. citizen, you must report the sale on your U.S. tax return and pay any capital gains taxes owed but you can claim a foreign tax credit for the Canadian taxes paid.

Consult a cross-border accountant to ensure accurate and efficient filing on both sides.

Pro Tips for a Smooth Sale

• Start early. The CRA compliance process can take several weeks.

• Work with an experienced Ontario lawyer and cross-border accountant.

• Let your Realtor know you're a U.S. seller — we can build the timeline and clauses around your needs.

• Consider professional currency exchange for better rates on your funds.

Have Questions? Let's Chat.

If you're thinking about selling property in Ontario and currently live in the U.S., we're here to help. Whether you’re ready to list or just want to explore your options, feel free to reach out for a no-pressure conversation.