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
3800, rue de Marly, secteur JO
Québec (Québec) G1X 4A5
Certain tax treaties may affect how capital gains are calculated.