FAQ & Resources Page
A Certificate of Compliance (also known as a clearance certificate) is a document issued by the Canada Revenue Agency (CRA) confirming that the appropriate tax has been reported or paid on the sale of Canadian real property by a non-resident.
Without this certificate, the buyer must withhold and remit 25% (or more) of the sale price to the CRA — even if you made little or no profit.
Reference: CRA — Certificate of Compliance Process
If you are not a resident of Canada for tax purposes and you are selling:
• A residential property
• A rental or investment property
• Vacant land
• Any other taxable Canadian real estate
…you are required to apply for a Certificate of Compliance using Form T2062 (and possibly Form
T2062A, if applicable).
The most common forms include:
• Form T2062 – For the disposition (sale) of taxable Canadian property
• Form T2062A – For other types of capital property or depreciable assets
We prepare and file the correct form on your behalf as part of our full service.
Reference: CRA – Form T2062, Request by a Non-Resident of Canada for a Certificate of Compliance
Processing times can vary depending on the CRA’s workload and completeness of your submission.
• Typical processing: 8–12 weeks (2–3 months) after CRA receives a complete application
• During busy periods or complex cases: Up to 120 days (approximately 4 months) or longer
We manage CRA communication to help minimize delays and ensure your application is complete the first time.
This estimate is based on current CRA practices and may vary depending on workload, documentation
completeness, and CRA review steps.
Without a Certificate of Compliance, the buyer must withhold 25% of the sale price and remit it to the CRA. When you obtain the certificate, the CRA calculates withholding on the actual gain, not the total sale price — often resulting in a lower, fairer amount.
■ Example: How CRA Withholding Works
A non-resident sells a Canadian property for $600,000 that was originally purchased for $400,000.
• Profit (Capital Gain): $200,000
• Without Certificate: Buyer must remit 25% of $600,000 = $150,000 to the CRA.
• With Certificate of Compliance: CRA applies withholding on the gain only: 25% of $200,000 =
$50,000.
Result: Obtaining the certificate before or shortly after closing saves the seller $100,000 in unnecessary withholding and accelerates the release of funds.
(This is a simplified illustration. Actual withholding may vary depending on expenses, property type, and
applicable CRA policies.)
You should apply immediately after signing a purchase agreement — ideally before closing. If the application is received by the CRA within 10 days of the sale, you avoid potential penalties.
If you fail to apply for a certificate:
• The buyer may be required to remit 25% or more of the sale price directly to the CRA.
• You could face additional penalties and interest charges.
• Recovering excess withholding later can take months through a separate tax return.
We handle every step — from calculating your capital gain to preparing the T2062 form and submitting it to the CRA.Your file is managed by a Canadian CPA familiar with the nuances of both real estate transactions and CRA compliance.
Get started today: info@compliancecertificates.ca