Final answer:
A Clearance Certificate, also known as a Certificate of Compliance, is the statutory declaration required to assure a buyer that they need not withhold funds for a non-resident seller's capital gains tax on closing.
Step-by-step explanation:
The statutory declaration that assures a buyer that they will not have to withhold funds on closing for a non-resident seller's capital gains tax is often referred to as a Certificate of Compliance, or by its formal name, the Clearance Certificate.
This certificate, issued by the relevant tax authority, confirms that the seller has fulfilled their tax obligations or has made arrangements to do so. As a result, the buyer is relieved of any potential responsibility for the seller's capital gains taxes.
In real estate transactions involving non-residents, it is crucial to obtain this certificate. Without it, the buyer could be held liable for any of the non-resident seller's unpaid taxes. To avoid such risks, it's highly advised that the buyer ensures this document is in place before proceeding with the closure of the sale.