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Tax implications of US personal mortgage

1021 Views 0 Replies 1 Participant Last post by  Roffensian
My wife and I are in the process of selling a home in the Caribbean and returning to Canada. Here (Honduras) international buyers are unable to get financing through local banks and US / Canadian banks are reluctant to lend on overseas properties. As a result, it's reasonably common to have the seller hold a mortgage for part of the purchase price if it helps get a deal done.

Our realtor has done this before and has a good reputation, so not worried about that side of things, but wondering what the tax implications are. The mortgage would be US based and I am neither a US citizen, resident, or tax payer. I used to have a US work visa (TN) but it expired several years ago. I own a company that has W8-BEN-E forms on file with US clients stating that the company and beneficial owners have no US tax status.

If anyone here knows enough about the US tax situation to know if I would have any US tax liability for income received through that mortgage that would be great, but really just looking to confirm that from a Canadian tax standpoint all I would need to do is to declare the interest as overseas income in my return. Is that accurate?

Sorry, very hypothetical right now as there isn't an offer with amount / term / rate to consider, but looking to ensure that I'm not causing a world of hassle for myself if we do go down that route to get a deal done.

Thanks for reading!
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