06 Dec What is a notice of assessment?
A Notice of Assessment, also known as NOA, is a statement from the Canada Revenue Agency notifying the taxpayer of the amount of tax they owe, if any, the amount of tax already paid, if any, tax credits received and contributions to a Registered Retirement Savings Plan. If there is a refund owing, a cheque will usually be included with the NOA. If there is an amount owing payment information will be enclosed.
It is received after the taxpayer files their tax return and the return is reviewed by the Canada Revenue Agency. It is a two page document, showing the taxpayer name, taxpayer insurance number, tax year and tax centre. It will then provide a summary of income, deductions, credits, taxes previously paid, among other items.
How important is an NOA to qualify for a mortgage?
An NOA is usually a document required by lenders and their underwriters to verify the borrower’s tax status especially in the case that the individual is self-employed. It is useful in not only verifying the borrower’s income, but also verifies whether the borrower has an outstanding tax liability. Along with other documents verifying income, the NOA should usually be provided to the lender within 2 weeks of closing. Failure to provide the NOA can delay, or even reject, the borrower’s mortgage application.
For a list of documents required for a mortgage application, contact us or get a copy of Carmen Costa’s book “The Reality of Mortgages”.