Sold Your Vancouver Property as a Non-Resident? Here’s What Happens to That 25% the Government Keeps

Picture this: you’ve accepted an offer on your Vancouver condo. You’re happy with the price. Everything’s moving along — until your lawyer says the words that stop you cold.

“We’re required to hold back $230,000 at closing. It goes directly to CRA.”

That’s what happened to Mei, a Hong Kong-based investor who sold her Vancouver condo in 2025. She’d bought it back in 2018 for $680,000. She sold for $920,000 — a solid gain after years of renting it out. And at closing, a full quarter of her sale price was sent to the Canada Revenue Agency before she saw a single dollar.

She wasn’t in trouble. She hadn’t done anything wrong. This is simply what happens when a non-resident sells Canadian property.

Here’s the reassuring part: Mei didn’t actually owe $230,000 in tax. Not even close. And if you’re in a similar situation — or planning to sell — this post explains exactly what’s happening, and how to get the overpayment back.

The Quick Version (If You’re Reading This on Your Phone)

• CRA withholds 25% of your total sale price at closing — that’s the gross price, not your profit
• Your actual tax is based on what you gained, not what you sold for — and it’s usually much, much less
• A Clearance Certificate (also called a Certificate of Compliance by CRA) is what gets you the difference back
• You almost certainly won’t get the certificate before closing — that’s normal and expected
• A CPA files the paperwork right after closing to start the refund process

That’s the big picture. Keep reading and we’ll walk through each piece.

Why Is 25% Being Held Back at Closing?

When a non-resident sells Canadian real estate, the buyer’s lawyer is legally required to withhold 25% of the sale price and send it to CRA. They don’t have a choice — it’s the law, and if they skip this step, they become personally liable for the tax.

This isn’t a penalty. CRA uses this withholding to make sure non-resident sellers pay Canadian taxes before the transaction wraps up. Think of it as a large security deposit held while the government figures out what you actually owe.

The catch? 25% of the gross sale price is almost always far more than what you’ll actually owe in tax. That gap — often tens or hundreds of thousands of dollars — is what needs to come back to you.

How Much Do You Actually Owe? (Real Numbers, Simple Math)

Let’s use Mei’s situation as an example.

She sold for $920,000. CRA withheld 25%, which is $230,000. She walked away from closing with $690,000 instead of $920,000.

But Mei’s actual tax isn’t based on the sale price. It’s based on her net gain — the sale price minus what she originally paid, plus improvements and selling costs.

Here’s how that looks:

Sale price	$920,000
Original purchase price + costs (ACB)	$680,000
Selling costs	~$28,000
Net gain	~$212,000

So Mei’s taxable amount is about $53,000 (25% of the net gain).

CRA is holding $230,000. She owes around $53,000. That means approximately $177,000 needs to come back to her.

That’s what the Clearance Certificate is for.

Numbers above are illustrative. Your actual tax depends on your specific purchase price, improvements, selling costs, and other factors. A CPA will calculate this precisely for your situation.

How to Get Your Money Back: The Clearance Certificate

A Clearance Certificate is an official document from CRA confirming what you actually owe in tax. Once it’s issued, the excess withholding is refunded to you.

Here’s how the process works after closing:

Step 1 — Your CPA files a form with CRA

This is the Clearance Certificate application (Form T2062). It tells CRA about the sale, provides your cost details, and asks them to calculate your real tax owing. This form needs to be filed within 10 days of completion of the sale — missing the deadline can mean penalties, so don’t sit on it.

Step 2 — CRA reviews your file

CRA reviews your clearance certificate application along with all the documentations your CPA provided with it. Depends the complications of the application as well as if all needed documents are provided, CRA processing time for your filing can vary from three months to nine months.

Step 3 — CRA issues the certificate

Once the Clearance Certificate is issued, you pay your actual tax (if it isn’t already covered by the withholding), and the rest is refunded to you. For most sellers, that refund is substantial.

That’s the process. It’s not instant — but it works, and it’s the only way to recover the overpayment.

“Why Can’t I Get the Certificate Before Closing?”

This is the question almost everyone asks. The short answer: you need a finalized purchase and sale agreement just to apply, and CRA takes three to nine months to process the application. Most property closings happen in 30 to 60 days. The timing simply doesn’t line up.

In about 95% of non-resident property sales, the 25% withholding happens at closing — no exceptions, no workarounds. That’s completely normal.

The goal isn’t to avoid the withholding. The goal is to file the Clearance Certificate application immediately after closing so your money comes back as fast as possible. Every week you wait is a week CRA is sitting on your funds.

How Long Until You See the Refund?

Once your payment is received by CRA, CRA typically takes about 4 to 5 weeks to issue the Clearance Certificate. Total time from closing to refund: typically 4 to 6 months when a CPA manages the process promptly. Without professional help, sellers often wait 12 to 18 months or more.

The difference comes down to how quickly the paperwork goes in and how good is the paperwork. A complete, well-prepared application moves faster than a rushed or incomplete one.

What a CPA Handles for You (And Why It’s Worth It)

This isn’t a simple form you fill out yourself. The Clearance Certificate application requires documentation of your original purchase costs, any renovations, legal fees, and more — and errors or missing information can delay your file by months.

Here’s what a non-resident tax CPA takes off your plate:

• Calculates your Adjusted Cost Base (ACB) — your original purchase price plus all qualifying costs and improvements
• Reviews any prior tax related documents that might affect your file
• Prepares and files the Application immediately after closing, before the 10-day deadline.
• Communicates directly with CRA during the review period if any questions come up from CRA, facilitate the payment, as well as following up on the final issuance of the Clearance Certificate.

Think of the CPA fee as an investment in getting $177,000 back several months sooner. The math is straightforward.

Where Are You Right Now?

Planning to sell? Start gathering your original purchase documents now — legal closing statements, renovation receipts, improvement records. The more organized you are before closing, the faster the the Clearance Certificate can be filed after. If you don’t have a Canadian Social Insurance Number (SIN), apply for a CRA Individual Tax Number (ITN) now — you’ll need it to file.

Just accepted an offer? Engage a CPA before closing day. Know that 25% will be withheld — plan your cash flow accordingly. Your CPA should be ready to file the moment the deal closes.

Already closed? Contact a CPA today. The 10-day filing deadline started on closing day. If you’ve passed it, you’re not out of options — but every day you wait adds to the delay in getting your money back.

Frequently Asked Questions

What is a Clearance Certificate and why do I need one?

A Clearance Certificate (also called a Certificate of Compliance) is an official document from CRA that confirms how much tax you actually owe on the sale. Without it, the buyer’s lawyer is required to hold the full 25% withholding indefinitely — the certificate is the legal release that gets your overpayment refunded.

How long does a Clearance Certificate take to get?

CRA typically takes three to nine months to process the application, depending on the complexity of your file and how complete your documentation is. Once your CPA files a thorough, well-prepared application right after closing, the process moves as fast as CRA allows.

What happens if I miss the 10-day filing deadline?

Missing the deadline doesn’t mean you lose your refund, but it can mean penalties and interest on amounts owing. Contact a CPA immediately — the sooner the application goes in, the better, and a CPA can assess whether any late-filing relief applies to your situation.

What is the withholding rate for non-residents selling Canadian property?

The default rate is 25% of the gross sale price for residential property. This is withheld by the buyer’s lawyer at closing and sent directly to CRA — it’s based on the full sale price, not your profit, which is why the refund at the end is often substantial.

Talk to a Vancouver CPA Who Specializes in Non-Resident Property Tax

The Clearance Certificate process is manageable — but it moves fastest when the right person handles it from day one.

At AL Accounting Inc., we guide non-resident property owners through every step: calculating your ACB, filing the Clearance Certificate, working with CRA, and recovering your overpayment as quickly as possible.

Our founder Anike, CPA, CGA, CAMS has helped clients from Hong Kong, mainland China, Taiwan and across the Asia-Pacific region navigate the sale of their Canadian properties. We speak English, Mandarin, and Cantonese — because tax paperwork is stressful enough without a language barrier.

Book a consultation with AL Accounting →

Not ready to book? Send us a message with your question — we respond within one business day.

AL Accounting Inc. | Burnaby, BC | al-accounting.com

Non-Resident Tax Services →