As Canadians with experience owning property in both Canada and Arizona, we are in a unique position to serve our international clients. Jason is the only REALTOR® in Phoenix, AZ who holds all of the following international-specific credentials that enables him to perform his job with exceptional expertise:
- Certified International Property Specialist
- Resort and Second Home Property Specialist
- Certified Luxury Home Marketing Specialist
- Internationally licensed REALTOR®
It is important to realize that Canadians who are selling an Arizona property for the first time might discover a few differences from selling property in their native country. Our REALTORS® are experienced in foreign-seller home sales and are fully capable of handling a successful sale of your Arizona property.
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Selling an Arizona Property as a Canadian
As a Canadian, you are probably going to realize the home-selling experience is slightly different in the United States. Since many Canadian buyers pay cash for their Arizona real estate, it is possible that you may receive a large sum of money for your home without the need to pay off any lenders.
In the state of Arizona, the purchase contract requires potential home buyers to provide a Loan Pre-Qualification Form along with the offer. Acting as a safeguard for the seller, this report is actually a document that indicates that the potential buyer has been pre-approved for borrowing funds necessary for the purchase of the home. With this safeguard in place, you can rest assured that potential buyers will have access to the funds necessary to purchase your home.
The Process of Selling Arizona Real Estate as a Canadian
Selling property in Arizona is relatively the same for Americans and Canadians. The first step after you decide to sell your property is to select a REALTOR® to represent you. Using state-of-the-art tools, Talka International Realty can determine the current market value of your home, assist you with the enhancement of your home’s curb appeal, and assist you with the proper staging of your home. Next, we handle all showings of the home to potential buyers, negotiations, and contractual arrangements. To see our comprehensive list of Canadian seller services see our property marketing services.
Possible Consequences for Canadian Sellers of Arizona Property
In the United States, sellers of real estate are subject to the U.S. capital gains tax. A special tax law also pertains to Canadian sellers of Arizona property. This law is known as the Foreign Investment in Real Property Tax Act or FIRPTA.
In the United States, a foreign seller of real estate must place 10% of the selling price into a special fund intended to cover the cost of the U.S. tax that is calculated on the income or gains of the real estate sale. At the end of the tax year, the seller can file a U.S. income tax return if he believes he has overpaid this tax. A refund will be issued if one is due.
However, certain exemptions are in place so it is possible that you might not be subject to the following. The first exemption occurs when the sale price of the home is less than $300,000 in U.S. funds and the new buyer intends to reside in the home as his principal place of residence. Furthermore, the buyer must intend to reside in the home at least 50% of the time that the home is in use over the next two years. In this situation, the seller does not need to withhold 10% of the selling price, but he must still pay any U.S. taxes that are due on the profit or gain from the sale.
The second exemption involves the existence of a withholding certificate that the foreign national has obtained from the IRS (Internal Revenue Service). This usually occurs when the seller is aware that he will not owe the full 10% of the sales price as a tax liability to the United States. The withholding certificate will indicate what percentage should be withheld.
If you have any questions, please contact us now. We look forward to providing you with a successful and timely home selling experience.