Buying Property in the UK
Hi David,
I am a Canadian citizen and I'm considering the prospect of buying a house in the English countryside. Ideally, I would like to be able to fix it up and then climb the property ladder over there. Would I need to use both a Canadian Tax lawyer and a UK Tax lawyer or just a UK tax lawyer? Would I need to pay taxes on any profits made from selling the house in both Canada and the UK? The plan is to put all / any profit from selling the first house into the second house and hopefully after 3 houses keeping the final house.
I've been to the bank here in Canada and have been told that I can get a credit line for the amount I would need to buy the house in England. Before I go further I need to work out what taxes I am responsible for when selling an International property.
Is there a site on the net where I can locate good information for Canadian residents who are thinking of buying International real estate and the pros and cons of such an adventure?
Thank you very much for any advice you can offer.
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david ingram replies:
You do not need a lawyer in Canada because the property is in the UK.
An exception is that the bvank likely wants to register the line of Credit against your Canadian house and a lawyer might be a good idea to protect your interests.
After the purchase, fix up and sale, you would pay taxes on the profit first to the UK and then have to convert the dollars to Canadian and report the profit in Canada as well.
You would claim the tax paid to the UK on lines 431 and 433 of the Canadian return and the corresponding lines on the provincial 428 if the federal credit did no use it all up.
I am a Canadian citizen and I'm considering the prospect of buying a house in the English countryside. Ideally, I would like to be able to fix it up and then climb the property ladder over there. Would I need to use both a Canadian Tax lawyer and a UK Tax lawyer or just a UK tax lawyer? Would I need to pay taxes on any profits made from selling the house in both Canada and the UK? The plan is to put all / any profit from selling the first house into the second house and hopefully after 3 houses keeping the final house.
I've been to the bank here in Canada and have been told that I can get a credit line for the amount I would need to buy the house in England. Before I go further I need to work out what taxes I am responsible for when selling an International property.
Is there a site on the net where I can locate good information for Canadian residents who are thinking of buying International real estate and the pros and cons of such an adventure?
Thank you very much for any advice you can offer.
_____________________________
david ingram replies:
You do not need a lawyer in Canada because the property is in the UK.
An exception is that the bvank likely wants to register the line of Credit against your Canadian house and a lawyer might be a good idea to protect your interests.
After the purchase, fix up and sale, you would pay taxes on the profit first to the UK and then have to convert the dollars to Canadian and report the profit in Canada as well.
You would claim the tax paid to the UK on lines 431 and 433 of the Canadian return and the corresponding lines on the provincial 428 if the federal credit did no use it all up.
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