Humber/Ontario Real Estate Course 1 Exam Practice

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Which of the following methods is NOT a valid way to resolve potential buyer liability for tax owing by non-resident sellers in Canada?

  1. A buyer's lawyer can hold back a percentage of the sale price.

  2. A seller can sign an affidavit indicating property ownership for over 10 years and claim tax exemption.

  3. A seller can provide a Ministry Certificate upon completion.

  4. A seller can sign a statutory declaration affirming non-resident status.

  5. A seller can obtain a tax clearance certificate from the CRA.

  6. A buyer can request tax prepayment from the seller.

The correct answer is: A seller can sign an affidavit indicating property ownership for over 10 years and claim tax exemption.

Option B is not a valid way to resolve potential buyer liability for tax owing by non-resident sellers in Canada because it mentions a seller signing an affidavit indicating property ownership for over 10 years to claim tax exemption. The ownership duration does not factor into the non-resident status of the seller or their potential tax liability. The correct ways to resolve potential buyer liability for tax owing by non-resident sellers include options A, C, D, E, and F, which involve holding back a percentage of the sale price, providing a Ministry Certificate or a tax clearance certificate, signing a statutory declaration affirming non-resident status, or requesting tax prepayment from the seller. Each of the correct options provides a valid method to ensure that the buyer is not liable for any tax owing by non-resident sellers upon completion of the property transaction, thereby safeguarding the buyer's interests and complying with relevant tax regulations.

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