Selling a Markham home as a non-resident of Canada involves the usual pricing, preparation and offer decisions—but it also adds a federal tax-compliance process that can affect how much money is released on closing. The most important planning point is simple: determine your Canadian tax-residency position early and involve an Ontario real-estate lawyer and Canadian tax professional before the property is listed.
This guide explains the practical seller workflow for a Markham house, townhouse or condominium. It focuses on Section 116 of the federal Income Tax Act, the CRA certificate of compliance, possible closing holdbacks, document preparation and coordination from abroad. It is general information, not legal or tax advice.
First, confirm whether you are a non-resident for Canadian tax purposes
Citizenship, immigration status, the address on your identification and the country where you happen to be on closing day do not, by themselves, settle Canadian tax residency. The CRA looks at residential ties and the person’s circumstances. A Canadian citizen living abroad may be a non-resident for tax purposes; a person who is not a citizen may still be a Canadian tax resident.
Do not ask the listing agent, buyer or staging company to decide this question. If residency is uncertain, ask a cross-border accountant or tax lawyer to review it before offers are accepted. The answer affects the closing process, the paperwork required from the seller and the protection the buyer’s lawyer will expect.
What Section 116 does when a non-resident sells Canadian real estate
Canadian real estate is generally taxable Canadian property. Under Section 116 of the Income Tax Act, a non-resident seller can notify the CRA about a proposed disposition before closing or must notify it no later than 10 days after an actual disposition, unless the statutory exception for a matching proposed-disposition notice applies.
The seller generally uses Form T2062 for capital property. Different property or circumstances can require another form, so the form choice should be confirmed professionally. The CRA says a notification for a certificate may be submitted online through My Account, Represent a Client or My Business Account, or sent to the applicable Section 116 Centre of Expertise.
The CRA issues a certificate after the required payment or acceptable security has been provided and the application is accepted. A certificate for a proposed disposition has a certificate limit; if the actual transaction differs from the proposal, updated information and possibly additional payment or security may be needed. This is why the accepted price, adjusted cost base and ownership details must be coordinated with the tax professional rather than estimated casually.
A closing holdback is not the same as the seller’s final tax bill
Section 116 puts potential liability on a purchaser who acquires taxable Canadian property from a non-resident without the required CRA protection. The current consolidated federal legislation, current to September 30, 2026, generally refers to 25% of the amount by which the buyer’s cost exceeds the certificate limit for the type of capital property discussed in this guide. If there is no certificate limit, that exposure can be based on the purchase price—not merely on the seller’s gain.
That purchaser risk is why the buyer’s lawyer may require a substantial amount to remain in trust rather than releasing all sale proceeds to the seller on closing. The exact holdback language, amount and release conditions are legal matters for the transaction lawyers. Depreciable, rental, business or other property can raise additional rules, so a seller should not apply a simple percentage from an online article to their own closing.
The holdback or amount paid to obtain the certificate is not necessarily the seller’s final Canadian income tax. The sale still has to be reported through the appropriate tax return. Depending on the facts, the final result could produce additional tax owing or a refund. Cash-flow planning should therefore separate three numbers: estimated net sale proceeds, funds temporarily unavailable at closing, and the final tax determined after filing.
Do not assume the principal-residence exemption solves the closing process
A property may have been the owner’s principal residence during some or all years of ownership, but eligibility and designation are fact-specific. Years of Canadian residency, changes in use, rentals, co-ownership, prior principal-residence designations and elections can change the calculation. Even where an exemption may reduce the eventual gain, the Section 116 certificate and closing requirements should be reviewed separately.
Similarly, becoming a non-resident does not automatically mean the Markham home was sold for tax purposes on the departure date. The CRA treatment of Canadian real property, departure tax and an eventual sale should be confirmed from the owner’s full circumstances.
Build the seller’s document file before choosing a listing date
- Ownership and identification: current title information, the names of all registered owners and identification acceptable to the lawyer.
- Residency review: the accountant or lawyer’s advice about Canadian tax residency, rather than an informal assumption based on citizenship or mailing address.
- Adjusted-cost-base evidence: the original purchase agreement and closing statement, plus invoices and permits for capital improvements that the tax adviser considers relevant.
- Use history: dates the home was occupied, rented, vacant or used differently, together with prior elections or principal-residence reporting.
- Financing: mortgage, HELOC and other registered-debt details, including payout and discharge requirements. Review the site’s guide to selling before a mortgage term ends.
- Property records: tax bills, utility details, leases, permits, warranties and records of material repairs. Known property-condition questions should be handled consistently with the site’s Ontario seller disclosure guide.
- CRA identifiers and filings: ask whether an Individual Tax Number is required. The CRA recommends submitting an ITN application separately from the disposition request to avoid delays.
Check Underused Housing Tax compliance where it may apply
The CRA states that it may refuse to issue a Section 116 certificate for certain residential properties if an affected non-resident, non-Canadian owner has not met required filing and payment obligations under the Underused Housing Tax Act. This does not mean every non-resident seller owes Underused Housing Tax. Filing status, exemptions, citizenship and ownership structure all matter.
The useful planning step is not to guess whether the tax applies. Ask the tax adviser to check prior-year filing obligations early enough to correct missing returns or payments before they interfere with the certificate process.
Plan the Markham sale while you are outside Canada
Choose local representatives and define authority
Confirm who can sign the listing agreement, offers, amendments and closing documents, and how identity will be verified. If a power of attorney may be used, the lawyer and brokerage should review it before an urgent signature is needed. Do not assume a scanned document or a foreign notarization will automatically be accepted.
Create a showing and property-care plan
An occupied property needs notice and access procedures. A vacant property needs insurance-compatible monitoring, heating, snow removal, landscaping, mail handling and a response plan for alarms or leaks. If the home is tenanted, Ontario tenancy rules and the existing lease require separate attention.
Keep pricing separate from tax
The list price should be based on the Markham buyer segment, relevant sales, current competition, condition and the seller’s timing—not an attempt to recover a tax holdback through an unsupported asking price. Start with the Markham seller hub and review the property against comparable homes in Unionville, Cornell, Markham Village, Berczy Village, Wismer or the applicable neighbourhood.
Illustrative cash-flow example—not a tax calculation
Assume an owner living abroad accepts an offer on a Markham home. The lawyer advises that the owner is a non-resident for Canadian tax purposes, and the CRA certificate will not be available by closing. The buyer’s lawyer therefore requires an agreed holdback in trust. The mortgage and normal closing adjustments are also paid, but the remaining holdback is not released with the seller’s other net proceeds.
This example does not establish the holdback amount, final tax or certificate timing. Its purpose is to show why a seller should not use “sale price minus mortgage and commission” as the amount immediately available for the next purchase or investment. The practical budget needs a separate line for restricted closing funds. For ordinary sale expenses, use the Ontario home-selling cost guide, then have the lawyer and tax adviser add the non-resident-specific items.
A practical timeline for non-resident Markham sellers
| Stage | Priority | Who should lead |
|---|---|---|
| Before listing | Confirm residency; retain lawyer and tax adviser; assemble ownership, cost-base and property records | Seller, tax professional and lawyer |
| Pricing and preparation | Review Markham comparables, repairs, access, insurance and remote property care | Seller and listing representative |
| Before accepting an offer | Discuss residency representations, closing date, certificate status and likely holdback | Lawyer, with tax input |
| After a firm sale | Complete the CRA application or update proposed-disposition information using the accepted price | Tax professional |
| Closing | Complete payout, adjustments, holdback and document execution | Real-estate lawyers |
| After closing | Finish certificate follow-up, release conditions and required Canadian income-tax return | Tax professional and lawyer |
Questions to ask before listing
- What is my Canadian tax-residency status on the expected disposition date?
- Which Section 116 form applies to this property and ownership structure?
- Can a proposed-disposition application be prepared before closing?
- What evidence supports the adjusted cost base and capital improvements?
- Do any Underused Housing Tax filings need attention?
- What holdback will the buyer’s lawyer require if the certificate is unavailable?
- How and where will documents be signed and identity verified?
- How will the home be insured, monitored and maintained until closing?
- What Canadian return must be filed after the sale, and when could a refund or balance become known?
Start with value, timing and the right professional team
A non-resident sale is manageable when the tax, legal and real-estate workstreams begin early. The listing representative can help establish market value, coordinate preparation and access, market the property and negotiate offers. The lawyer and tax professional must handle residency, Section 116, holdback, filings and transaction-specific advice.
If you own a Markham property and are considering a sale from outside Canada, request a complimentary English home evaluation. For a property-specific preparation, pricing and marketing discussion, review selling with Richard. There is no obligation to list, and tax or legal questions will still be referred to the appropriate professional.
This article provides general real-estate information as of November 14, 2026. It is not legal, tax, accounting or financial advice. Tax residency, exemptions, forms, withholding, adjusted cost base, holdbacks and filing obligations depend on the seller, property and transaction. Consult an Ontario real-estate lawyer and qualified Canadian tax professional.
Official sources
- Canada Revenue Agency: Disposing of or acquiring certain Canadian property, accessed November 14, 2026.
- Income Tax Act, section 116, consolidated legislation current to September 30, 2026 and last amended June 18, 2026.
- CRA Guide T4058: Non-Residents and Income Tax, 2024 edition, accessed November 14, 2026.
- CRA: Real-estate-sector compliance and non-resident sellers, accessed November 14, 2026.