Published | Categories : Income tax - individuals, Income tax - businesses, Better tax practices – individuals

Disposition of Taxable Québec Property by a Person Not Resident in Canada

Any person not resident in Canada (a non-resident) that disposes of taxable Québec property must obtain a certificate from Revenu Québec. The document certifies that the non-resident has met all its fiscal obligations with regard to the disposition and relieves the acquirer of any liability for income tax arising from the transaction.

Non-residents must obtain a certificate even if the transaction results in a capital loss.

Once the certificate has been received, the notary can release the proceeds of disposition to the non-resident.

So that certificate applications can be processed more quickly, Revenu Québec asks that notaries and other professional representatives inform non-residents of all the documents required in order to obtain a certificate, including any additional documents required for processing.

Documents required in order to obtain a certificate

To obtain a certificate, non-residents must include the following documents with their application:

  • Form TP-1097-V, Notice of Disposition or Proposed Disposition of Taxable Québec Property by an Individual or Corporation Not Resident in Canada, duly completed
  • A copy of the non-resident's acquisition contract
  • Documents that justify the adjusted cost base of the property (such as an invoice from the broker or notary, invoices supporting improvements made to the building, etc.)
  • A copy of the non-resident's disposition contract for the property, or any other written agreement (such as a promise of sale) signed by both parties to a proposed disposition
  • If the disposition of the property results in a capital gain, a cheque or money order made payable to the Minister of Revenue of Québec for 12.875% of the capital gain realized (or 30% of the capital gain realized, in the case of a life insurance policy)

Additional documents required for processing

For faster processing of their applications, non-residents must include the following documents with their applications:

  • An act of transmission (in the case of a transfer)
  • A will (in the case of a legacy)
  • Financial statements or an annual report (in the case of transferred shares)
  • Form TP-274-V,  Designation of Property as a Principal Residence (in the case of a principal residence)

Certificate applications made before the disposition of the property

Where an application for a certificate is made before the disposition of the property, the non-resident is not required to file another copy of form TP-1097-V when the disposition actually takes place. However, the certificate is no longer valid and a new copy of form TP-1097-V must be filed if any of the following is true:

  • The acquirer is not the person initially named in the written agreement.
  • The amount of the proceeds of disposition is different from the estimated amount.
  • The adjusted cost base is different from the one reported on the form.

Sending the application

Certificate applications must be sent to:

Certificat – Non-résident
Revenu Québec
3800, rue de Marly, secteur JO
Québec (Québec)  G1X 4A5

Note

Certain tax treaties may affect how capital gains are calculated.

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