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We are Canadian citizens who moved to Costa Rica and purchased a property. We are selling and moving back to Canada (have only been gone from Canada for 1.5 years). We did not make any money in the sale, we broke even, and will be depositing the same amount into our Canadian account that we originally withdrew. We will wire transfer the money of the CR sale back into our Canadian account, will we have any taxes to pay in Canada for this?
Hi Fabiana,
The Canadian tax reporting requirements for your property in Costa Rica depends on whether you sold this property when you were a resident of Canada or a non-resident of Canada.
Non-Resident
If you sold the property in Costa Rica when you were a non-resident of Canada, then you do not have to report the sale to the Canada Revenue Agency (CRA). The cash proceeds from the sale can be brought back to Canada without payment of Canadian income tax.
Resident
However, if you sold the property while you were a resident of Canada, then you have to report the sales proceeds, selling costs, cost amount of the property, and capital gain / loss incurred on the sale. I understand that you did not make a profit on the sale, but you will still have to report it as a resident of Canada. In addition, if you own foreign property the total of which is more than $100,000 (cost amount), then you have to report all foreign property you own on form T1135, Foreign Income Verification Statement. This form is attached to your Canadian Personal Tax Return (T1).