Conference kaosws::canada

    This is a real toughie ... you need a lawyer practised in Canadian
    real estate to answer the tax questions particularly since you are
    a non-resident for tax purposes in Canada.
    
    Potential Problems:
    
    . The real estate market is deader than a dodo it would seem so
      it could take a LOOOONNNNGGGG time to get a sale.
    
    
    The current exchange rate is around 80c Canadian per $1 US ... a
    month ago it was 85c per $1 ... it stands a good chance of recovery.
    
    There is not a real estate notes file for Canada, but you could
    enter a for sale note if you like in the For Sale note ...
    
    Do a DIR/TI="SALE" to find it.
    
    Good luck ...
    
    Stuart
    
    

    Regarding the "real estate market is deader than a dodo" comment of the
    previous note, don't assume that what is true for the urban market is
    also true of the vacation home market.

    Maybe true ...  but ... if you look at the reasons that the urban
    housing market has pancaked ... essentially the referendum and the
    negativism that persists about the economy, if people aren't willing
    to risk putting money into their gains tax free principal residence,
    you can be quite certain that they will be reluctant to invest
    in recreational property which is subject to capital gains.
    
    The only exception to this is when the recreational property is
    capable of being lived in full time ... when people who want to
    move out of the city might consider buying it.
    
    Normal seasonal urban market downturns are not normally reflected
    in the vacation home market ... because there usually is not the
    need to move at a tiem to satsify schooling / weather etc.  In fact
    the winter can be a popular time in the vacation home market, where
    the residential market goes quiet.
    
    So .2 is often right ... but from what I gathered, the market in
    general has fallen very flat this time.
    
    Stuart

    My comment came from the fact that while the real estate market in
    Toronto has been dismal for at least two years.  However the vacation
    market (Muskokas et al.) have not faired as badly.  All those baby
    boomers looking for a retirement place I suppose 8-)

    Oh indeed ... but I am talking the current short-term slump ... that 
    started just before referendum.  If the base noter was looking for
    a quick sale, he could be out of luck ... but on the other hand
    patience will help.
    
    Stuart

    Thank you for all your input,  especially regarding the exchange rate. 
    I was up there in August to look at the cottage, and the rate was at
    13% then.  It sure has taken quite a drop.  I am not in a rush to sell
    but the real estate agent is.  She is really trying to convince me that
    this first offer that I got is the only offer I am going to get...
    
    I know that in the spring more people will be out looking than in the
    dead of winter, and the trees look a lot better with leaves than they
    do right now.  
    
    What concerns me most is what taxes will I be hit with.  I am still a
    Canadian citizen but have lived in the state almost all my life.  She
    seemed to think that because I am Canadian, the taxes would be less.  So
    now I need to contact the Internal Revenue Service and see if they can
    answer any of my questions.  I also thought the GST would affect this
    type of sale but the real estate agent says that it would not.  
    
    regards,
    
    lynne
    

    A lot of agents will try to force you on your sale ... they are looking
    for income in hard times ... she needs the cash too no doubt.  She 
    recommended a listing price ... if she is pushing you to take an
    offer more than $5K less than the listing price then she's saying
    that the listing price is wrong!  If you can wait for better economic
    times, then why not!  Tell the agent to go fly a kite ... then
    talk to 2 or 3 agents from different companies in the spring and
    list again with the one you feel most comfortable with ... not
    necessarily the one who gives teh highest listing price.  Many agents
    over-price and force you down when an offer comes in with lines like
    "it's the best you'll get with x,y and z wrong with the place"!
    
    One important thing is not to let the listing go stale ... if you
    decide to wait for the spring, take it of the market in the meantime.
    Leaving it on makes and it not moving makes people wonder what is
    wrong with it, forcing your price down further.
    
    The only taxes that might apply to the sale from Canada are
    
    a) Capital Gains Tax on any deemed gain from valuation date (when
    you acquired it) ... for this keep details of the agent's valuation
    and listing in case you have to negotiate a "valuation" with Revenue
    Canada ... to the date it is finally sold.  Whether you are liable
    to this as a non-resident and it is selling an inheretance, I don't
    know.  My suspicion is that your tax liability here will be minimal
    anyway.
    
    b) GST on the real estate fees.  Say the property sold for $100,000.
    Real estate fees are typically 6% ... so R/E fees are $6,000 and
    the GST is 7% of that $420.  You *may* be entitled to a refund on
    that as a non-resident ... but you'd have to check with Revenue Canada.
    
    c) legal fees are not subject to taxes ... the fees themselves would
    probably be around $500-$750.
    
    d) Any taxes you are liable for in the US on the inheretance can
    probably be reduced by the amount you are liable for Canadian Capital
    Gains tax.
    
    As I mentioned before ... the important thing to do here is to have
    the conveyancing done by a lawyer familiar with the tax rules for
    non-residents.
    
    Stuart
    
    Note that any Capital 
    

    >The current exchange rate is around 80c Canadian per $1 US ... a
    >month ago it was 85c per $1 ... it stands a good chance of recovery.
    
    Stuart, not to confuse the readers  - I believe you have your units
    mixed up.  The exchange rate is around 1.26 Canadian per $1 US,
    or 79c US per $1 Canadian.  In any case, a great time to visit Canada!
    
    /George

    You are indeed right, my brain must have been out to lunch when I
    pu the units in!
    
    Thanks
    
    Stuart