What percent is capital gain tax on profit made on sale of Canadian real estate by a U.S. citizen? ______________________________________________________________
david ingram replies:
Canada taxes residents AND NON-RESIDENTS at the same rate as opposed to the US which imposes AMT on the sale of US real estate by a non-citizen or non-resident.
Canada taxes 50% of the capital gain on a progressive scale ranging from about 23% at less than $36,000 to about 43% at amounts over $120,000 - To be exact, the rate for 2006 is actually 22.57% at $36,378 or less and 42.92% at over $118,285.00
At 2006 rates, if you made a profit of $400,000 which would be $200,000 each between a husband and wife, they would each have to pay tax on $100,000 of $30,538.97 each which is 15.27% tax (on the $200,000) and compares favorably with the 15% max in the US. In this case, the US would allow a federal foreign tax credit against any US tax by filling in form 1116.
If the profit was $200,000 split between two people, they would each owe Canada $12,646.36 on their $100,000 share.
Happy to help with the returns if you do sell. �
CEN-TA Cross Border Services - Tax, Visas, Immigration