Getting a property sold in Ottawa, often involves having that property listed first. This is followed by accepting the offer to have the property purchased, after which there is an automatic binding contract to get the property sold. The binding contract is a legal document that obliges and ensures both the seller and buyer of the property honor their part of the deal. In order to finalize the sale, the sellers must employ legal services.
The two basic things every seller of a property puts into consideration are: Non-residential seller procedure and Closing costs.
There are a number of closing costs which every seller must consider, once at closing. These costs will come directly from sales, if included. Commissions come in different types, part of which are:
- Mortgage Payouts – If the property has been mortgaged, all payments have to be made fully. All and any prepayment penalties that are relevant to the mortgage terms are included in this type of mortgage payout. Therefore, in order to avoid surprises during sales, each seller is advised to contact his/her mortgage broker, so as to determine and know the amount of these payment charges.
- Realtor Commissions – The commission payments made to both realtors, is usually seen to by the seller. The commission fees for the buying and selling agents are subject to GST and change.
- Adjustment – There are usually a number of stated adjustments, either in credit or debit form that prorate for municipal utilities, strata free, property taxes, and in situations where the property is tenanted, security deposits and rental income.
Whether or not you choose to employ the services of a personal real estate owner or public notary, legal fees are normally around $600-$1000. The payment of these fees cannot be avoided, and can be more or less depending on extra time and work put into it by the lawyers.
Deferred or Delinquent Property Taxes – In order to make transfer of ownership possible, and continue with the sale, all and any delinquent or deferred property taxes must be fully paid.
For a non-resident seller, liability can be avoided for his/her unpaid taxes, by holding back about 25% or more ( depending on the use of property) of the sale proceeds, until the non-resident seller tenders a Clearance Certificate from the Canada Customs and Revenue Agency.
A non-resident seller should employ the service of a tax expert, in order to get assistance in obtaining Clearance Certificate from the Canada Customs and Revenue Agency. Since getting the entire process done can last for 2 months, obtaining the clearance certificate should be done fast. Once the full tax payment has been made, a Clearance Certificate will be issued, not sooner before payment is made, but as soon as payment is made. The Canada Customs and Revenue Agency will request the payment of any payable or outstanding taxes by the seller, while examining whether or not capital gains tax is also payable.
The tax, legal fees and commissions on the sale cannot be deducted for purposes calculating and arriving at tax owing at the time of sale. The seller (non-resident) can claim these expenses by filing a Canadian tax return immediately after the sale.