Buying A Home The First Time

When we first bought our house/home, we were actually quite dumb at everything and didn’t know what to expect.  We didn’t really have anyone to give advice since the spouse’s parents owned their own home inherited from their grandparents.

So what can one expect when you want to buy yourself a home/house and live happily ever after? Ok, hang on before we go any further, dreaming is good and finding the perfect home is wonderful but don’t forget to check into the finances of the house before buying it.  When you buy a house from a non-resident of Canada, you could become liable by law to pay a tax on behalf of the vendor.  This can happen if the vendor did not look after the necessary tax arrangements.

The unpaid taxes owed by a non-resident vendor on the sale of a house can be significant in certain situation, as high as 25 % of the price of the property.  So, protect yourself, be vigilant about things like that and make sure the vendor has a certificate of compliance, and get yourself a copy of it.

The certificate is issued to the vendor by the Canada Revenue Agency (CRA).  It’s proof that the vendor has made the necessary tax arrangements with the CRA to dispose of (sell) taxable Canadian property.  Without a copy of the certificate, you could be held responsible for paying the CRA taxes of up to 25 % of the cost of the house.  The certificate will protect you from any further tax liability left unpaid by the sellor and will save you from some very unpleasant surprises.