We got a comfort letter regarding the sale of real estate by a non-resident and forwarded it to the lawyer but he is not taking any action. Isn’t the lawyer supposed to release the funds, except for 25% of the capital gain?
That’s up to the lawyer. There are probably laws they have to follow in this regard (which I don’t know, being an accountant, not a lawyer), but law offices also have their own policies and procedures. So, if I was the seller, I would have asked the lawyer BEFORE hiring his/her firm what the process would entail, what their policy is, etc.
You are referring to the Clearance Certificate for Sale of property by non-resident? Correct, normally lawyer holds back 25% of PROCEEDS; and only released to vendor once CRA issues the Clearance Certificate; have done a few; takes many months!
Correct. If the lawyer releases funds after the certificate is issued, what is the purpose of comfort letter??
You can search CRA site for comfort letter, but not sure the reason in this situation.
Ok. Found the info online..I guess I just have to wait for the certificate
Just clarifying “wait for certificate”; you have applied for it with the supporting docs? docs for the purchase and docs for the sale?
The lawyer is required to release all but 25% of the sale price, unless you can get a clearance certificate. They are not required to release all but 25% of the capital gains. They can release the required withholding to the CRA, which is either 25% of the sale price, or the amount that the CRA requests, but the funds have to be released to the CRA following the instructions issued by the CRA, including a payment voucher that the CRA will provide.