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How Are Capital Gains Treated When Canadians Sell Florida USA Real Estate?

How Are Capital Gains Treated When Canadians Sell Florida USA Real Estate?

Capital Gains

When you purchase a US property in Florida and it goes up in value over time and then you sell it, the difference between what you received when you sold the property compared to what you paid for it, is called capital gains. Remember, capital gains is taxed by the government.  This profit that you generated is called capital gains.

Similar to in Canada, you would need to pay taxes on any investment property you hold that gained in value.  However, there is a difference for non-residents of the USA when selling US real estate.

When you sell Florida real estate, there is a 10% withholding tax. The withholding tax is offset by the capital gains tax payable when you complete your US tax return at that time. The capital gains tax rate is 15% if you have held on to the property for more than 1 year.

Tip: If you file your paperwork with the IRS ahead of time, well before you close your property, there is an option to reduce the amount of withholding taxes paid, but you need to speak with a tax specialist about this.  This will involve doing some work upfront.