Tax on Rental Income from Canadian Property

Rental income from Canadian property

Non-residents of Canada are subject to Canadian income taxes if they receive rent from Canadian property.
If any of the following pertain to your situation you are strongly advise you to meet with one of our accountants.

Rental income and non-resident tax

If you are receiving rental income from real property situated in Canada, you are subject to a non-resident withholding tax. Your Canadian agent is required to provide forms detailing gross rental income received and non-resident tax withheld.

Options:

Elect to file a Canadian tax return and pay tax on the net rental income. (the rental return must be filed on time to be valid)
Reduce the withholding tax by electing to have the non-resident tax withheld on the net rental income instead of gross rental income. (this requires filing appropriate forms by December 31st of each year)

Tax return filing requirement

You must file a Canadian tax return by the due date or you will be assessed tax on the gross rental income, along with interest on the amount of tax under withheld

The CRA will no longer allow a non-resident to file a tax return and pay tax on the net rental income if a Form NR6 has not been filed or had 25% of gross income withheld.

Aylett Grant Tax LLP will help you:

File the necessary rental returns to help you minimize your tax liability
Prepare the appropriate forms on behalf of your agent (NR4)
Reduce your non-resident tax withholding at source by the timely filing of required forms