I'm an American looking at some property in BC, but I'm having a little trouble getting a handle on the tax implications. I have gotten as far as figuring out the 25% standard withholding tax, and filing the section 216 to have that withholding done on net income rather than gross, just wondering if anyone can add some insight to the process or point to some good resources and or professionals that might help give me some insight and confidence, or point me to best practices where this is concerned. Thanks.
Don't you worry, there will be taxes at every step of the journey ;-)
Acquisition
In BC there you will pay a Property Transfer Tax based on the value/sales price of the property. The rate is 1% for the first 200K in value, 2% on amounts in excess of 200K.
If the property is non-residential or mixed use, you will pay the federal Goods and Services Tax (GST) on that portion of the property's value which is is not residential. If the property is a new construction, you will pay the GST on the sales price of the property.
Operation
As in most places, there will be annual property tax to the province / municipality.
If the property earns income (rent) you will be subject to the 25% upfront withholding (as you previously mentioned) on revenue. You will get credit for this when you file your Canadian and/or US taxes. Best to consult an accountant with cross border real estate and business expertise to get a full understanding of how you should hold (own) any Canadian properties to best fit your situation and mitigate tax liabilities.
Disposition
As a non-resident, when you sell a property, you must notify the Canadian Revenue Agency (CRA) pretty much immediately (something like 7-10 days if memory serves) to obtain a certificate of compliance. Failure to do this can result in per-diem fines.
There will also be a withholding on the capital gains taxes realised from the sale.
How things proceed upon death will depend upon how you hold (own) the property. Canada does not impose estate taxes however there will be a deemed disposition (depending on how the property is owned) of the property at death and the estate will be subject to income tax on all accrued capital gains.
The best advise here is the same that I expose to Canadians investing in the U.S.A.; find an accountant and attorney with cross boarder real estate and business expertise and develop the strategy for organisation and ownership which best meets your near, mid, and long-term goals ... naturally, you should do this before purchasing any property in Canada.