# Canadian buying property in Sweden



## CanuckInTheUK (Sep 14, 2012)

Hello All,
(guess a name change is in order....) No longer in the UK... Been in Sweden for two years now and want to buy a home for myself.

Starting the process to withdraw my rrsp funds in Canada to put down on this home (my first purchase ever). Ive been trying to read up on the tax treaty/set up between Canada and Sweden and im afraid my brain is melting from all the legal speak. 

Does anyone have any experience being in this sort of a situation? Or even just withdrawing funds to use for property purchase in another country? Just hoping to avoid paying 25-30% tax on this but it may just be inevitable! 

Thanks for reading!!


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## CanuckInTheUK (Sep 14, 2012)

Update for anyone reading!

I'm filling out a NR-301 form to send in to my RRSP company to see about reducing the tax amounts that may affect my withdrawal. 

Will report back on what the results are.


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## Nononymous (Jul 12, 2011)

Presumably you became non-resident and ceased filing with CRA when you left Canada?


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## CanuckInTheUK (Sep 14, 2012)

I dont think that I ever did any paperwork to do that officially... I still havent filed my 2017 taxes.. When I left Canada, I left my husband and travelled Europe as a sort of mid-life crisis/gap year... landed in Sweden and have been here since. 

As for not filing my taxes.. I am owed money and do not have a good reason for why I havent done it yet..  :tongue1: (need to get on that!)


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## Nononymous (Jul 12, 2011)

CanuckInTheUK said:


> I dont think that I ever did any paperwork to do that officially... I still havent filed my 2017 taxes.. When I left Canada, I left my husband and travelled Europe as a sort of mid-life crisis/gap year... landed in Sweden and have been here since.
> 
> As for not filing my taxes.. I am owed money and do not have a good reason for why I havent done it yet..  :tongue1: (need to get on that!)


You've got some things to sort out with CRA then. You'll want to establish non-residency and then figure out what that means for the RRSP withdrawal. If it's a long-term move you can't really claim to be resident any more and use the health care system when you visit and all that.


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## NickZ (Jun 26, 2009)

RRSP withdrawals can be affected by the social security treaty . You need to check that one. 

https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-international/before-apply.html

I don't see Sweden on that list. You'd have to pay the full withholding on any withdrawals.


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## CanuckInTheUK (Sep 14, 2012)

Nononymous said:


> You've got some things to sort out with CRA then. You'll want to establish non-residency and then figure out what that means for the RRSP withdrawal. If it's a long-term move you can't really claim to be resident any more and use the health care system when you visit and all that.


Thanks, yes I need to sort it. I havent claimed to be a resident since leaving and didnt plan to. And thankfully, Sweden has amazing healthcare as well so no worries on that one!


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## CanuckInTheUK (Sep 14, 2012)

NickZ said:


> RRSP withdrawals can be affected by the social security treaty . You need to check that one.
> 
> https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-international/before-apply.html
> 
> I don't see Sweden on that list. You'd have to pay the full withholding on any withdrawals.



Thank you for the link! I had tried to look for that the other day but brain started melting with trying to sort it all out. Indeed, Sweden is not on the list so it appears you are correct. Ah well, was worth looking into.. I've sent the NR-301 to the company so i suspect they will say the same. I'll update when I hear regardless!


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## Nononymous (Jul 12, 2011)

I'm not super familiar with the rules, but I believe that RRSP withdrawal prior to 65 does involve a tax hit. There are possibly programs that defer or reduce this tax for first-time home-buyers, but no idea if this would apply to homes purchased outside Canada.

Before you pull the trigger and start making withdrawals, I would recommend sorting out your non-resident status with CRA (and filing any late returns in the process). Potential refunds of tax withheld from the RRSP withdrawal could also depend on residence status and foreign income. I'm just guessing here, but it could be a bit complicated so you may want some professional help.


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## NickZ (Jun 26, 2009)

Age doesn't matter. RRSP withdrawals always go into income. The money was tax exempt going in.


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## Nononymous (Jul 12, 2011)

NickZ said:


> Age doesn't matter. RRSP withdrawals always go into income. The money was tax exempt going in.


I sort of thought that but wasn't certain - thanks for clarifying.

So the issue then is what is the OP's income at the time of withdrawal - are they working in Sweden, is the calculation based on global income, how is it treated for a non-resident?

They could of course file returns with a Canadian address, claiming to be resident, and ultimately pay lower tax on the RRSP withdrawal if they declare no foreign income. But that would probably be illegal.


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## NickZ (Jun 26, 2009)

Being non resident the only Canadian issue is the withholding on the RRSP. No problem with the global income. I don't know where the OP is from but if they tried to claim to be Canadian the risk is provincial and federal tax. The combined on a home purchase is likely more than the 25% withholding. 

From the Swedish side? No idea.


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## Nononymous (Jul 12, 2011)

One further thought - don't forget CRS. Swedish tax residency should be declared on all Canadian accounts.


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## Nononymous (Jul 12, 2011)

I believe the OP is Canadian, left the country a few years ago, settled in Sweden somehow, hasn't filed a thing with CRA one way or the other, and now wants to make a substantial RRSP withdrawal.


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## CanuckInTheUK (Sep 14, 2012)

*CanuckintheUK*

Thanks both!

I had always been under the impression that if you waited until you were of retirement age that they would then be tax-free but i have never looked into it so what do i know? =P

But form is submitted, tax return is in the works for 2017 (oops) and as I said, I'll let you know what happens just for closing the thread!


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## Moulard (Feb 3, 2017)

NickZ said:


> I don't see Sweden on that list. You'd have to pay the full withholding on any withdrawals.



There is both a tax treaty and a social security agreement in place between Canada and Sweden....

Tax Treaty....

https://www.treaty-accord.gc.ca/text-texte.aspx?lang=eng&id=102416

Social Security Agreement

https://www.treaty-accord.gc.ca/text-texte.aspx?lang=eng&id=104678


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## NickZ (Jun 26, 2009)

The point was countries on the list I posted get special treatment. For example Italian tax residents are exempt on the first $12K a year. Swedish residents OTOH get hit by the full 25% withholding.


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## CanuckInTheUK (Sep 14, 2012)

wow just realising now that with my last response i seemed to have missed a few others!

I am Canadian, left Canada in 2017 to travel, applied for work while in Europe, got a job in Sweden that provided a work visa.

It is true that I have not filed in Canada since but there was no nefarious intent there. I just .. havent. And dont have a good excuse either.

The question was indeed about making a substantial withdrawl from my RRSP funds to buy property here in Sweden. Which of course has reminded me front and centre that I need to take care of that last filing for my 2017 taxes.

I have no intent to lie to either country, i will ensure Canada knows that I have not been a resident since mid 2017. I have not earned salary in Sweden during 2017. So all should be square from there.

In regards to the form I submitted to my RRSP company to determine what tax rate I could possibly be held to (the NR-301), I have not yet heard back. As promised before, I will report back even if its just for everyones curiosity. 

Home purchase is on hold until taxes are filed.

Happy Friday!


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## NickZ (Jun 26, 2009)

The main thing to watch on your exit tax form is deemed disposition.

If you own any investments outside your RRSP they're considered sold at the time you leave. That means you'll have a paper gain or loss . The loss doesn't hurt you but the gain will be taxed.

I can't remember the rules for carry back on losses. But if you had a loss I think you can go back and refile previous years to offset an equivalent gain. But there is a limited number of years you can go back.

If you've been carrying forward a loss now is the time to use.


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