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Debra, Lawyer
Category: Canada Law
Satisfied Customers: 101005
Experience:  Lawyer
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My mother has Korean citizenship, but does not have Canadian

Customer Question

My mother has Korean citizenship, but does not have Canadian residency. She purchased a house in Vancouver last May, but she wants to sell the house, and to buy a different one downtown. We heard that it is not possible to do that, because she is a foreigner, and the Canadian government will seize the money. I would like to know whether or not she can reinvest her money in another house while saving the rest of the money in a Canadian bank. Is it okay for her freely to sell her house and then buy another house, although she is a foreigner and she didn't actually live in Canada for a year?
Submitted: 1 year ago.
Category: Canada Law
Expert:  Debra replied 1 year ago.
What you heard is incorrect. But, did the house increase in value from the time she bought it?
Customer: replied 1 year ago.
the value of the house has increased from 900,000 to 1,400,000 Canadian dollar. We wonder whether it is okay to sell the house and to buy a 900,000$ house in a downtown, while saving the rest of the money in the Canadian bank. What restrictions do we need to consider? Thank you.
Expert:  Debra replied 1 year ago.

Your mother will have to pay capital gains tax on the increase in value.

And there is a 25% withholding tax that your mother will be subject to when she sells the house. It will be based on the increase in value.

But she will then file a tax return as a non-resident and if the withholding tax was too high she will get a refund.

So buying another house is of course your mother's choice but it doesn't save her from paying these taxes.