What happens if a non-resident seller doesn't get tax clearance before the sale closes?

If a non-resident seller closes without a CRA clearance certificate in hand, the buyer is generally required to withhold a portion of the purchase price and remit it to the CRA as protection against the seller's potential unpaid Canadian tax, rather than releasing full payment at closing. This isn't optional for the buyer to waive out of goodwill; it's a protective step buyers and their lawyers insist on because of their own personal liability exposure if they don't withhold and the seller turns out to owe Canadian tax.

Practically, this means the seller doesn't get complete access to their proceeds right at closing, regardless of what the purchase agreement might otherwise provide. The seller can typically still pursue the clearance certificate after closing, and once it's issued, or the actual Canadian tax liability is otherwise resolved, the withheld funds can generally be released or applied against what's actually owed — but that adds a real administrative step and delay that could largely have been avoided.

Non-resident sellers planning a sale should start the clearance certificate process as early as possible and build the realistic timeline into the closing schedule, rather than assuming it can be sorted out at the last minute.