How much of the purchase price must a buyer withhold when buying from a non-resident seller in Ontario?

The federal rules under the Income Tax Act set a specific percentage a buyer must generally withhold from the purchase price when buying from a non-resident seller, applied either to the full purchase price or, once a clearance certificate has been obtained, to the smaller net gain the certificate confirms instead. Because this is exactly the kind of figure that is specific, technical, and worth getting precisely right rather than estimating, the applicable percentage should be confirmed directly with your lawyer or a tax advisor at the time of your transaction rather than assumed from a general recollection.

What matters practically is understanding the mechanics: withholding without a certificate is calculated on a larger base than withholding with one, which is a major reason non-resident sellers are encouraged to pursue a certificate early. The buyer's lawyer is typically the one who calculates and administers the actual holdback based on current guidance, so this is not something a buyer needs to work out unassisted.

Confirm the applicable withholding percentage and how it will be calculated with your lawyer as part of preparing for closing, rather than relying on an assumed figure.