U.S. Real Estate Tax for Canadians

Investment in US real estate has become a common practice. If you are a Canadian investing in vacation homes or rental property across the border, it is necessary to be aware of all the associated taxes. Owning a property in the US would essentially include federal and provincial taxes in addition to the real estate tax for Canadians.

Two sets of regulations and tax laws for US real estate investment would make the paperwork tedious and complicated. However, professionals at Madan Chartered Accountant are well versed in US real estate tax for Canadians and can provide unique ways to ensure your investment plan allows for minimization of taxes. Our optimal tax structure will guarantee a reduction in your tax payments.

Please review our brochure, Cross Border Tax Structure for U.S. Real Estate Investments, to understand how you can invest in U.S. real estate as a Canadian without being double taxed.



Client Testimonial:

We used Madan Chartered Accountant to file US tax forms for US Directors of a Canadian company. Advice was accurate, forms were completed and filed in a timely fashion. Price quoted to prepare the forms was extremely reasonable and no surprises at the end when the work was complete. Great experience considering I found them on the intranet. Good job to Andrew, Francis and Sarah. Highly recommend their services. - Tracy Norris

Need more information? Call us at (905) 268-0150

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Comments 11

  1. I have found the articles on this webpage to be very helpful for Canadians with U.S. real estate property. It gives the property-owners more insight from the tax perspective which some of us do not consider when buying property. Thank you!

  2. Your website has a lot of information relating to U.S. and other international tax information. I live in Toronto and would like to know some more information on U.S. estate tax relating to U.S. rental property. Thank you in advance.

  3. Hi Linda, thank you for your comment. For more information on your requested topic, please refer to the article “Tax Guide for Canadians Buying U.S. Real Estate” on our website. You should be able to see the name of this article on this webpage.Please let us know if we can assist you with anything else. Thank you.

  4. Hi,

    I am a Canadian resident and have US real estate rental property. Is there a way to avoid the 30% U.S. withholding tax on the gross rental income that I receive?

  5. Hi Magdalena, yes, you can make an election with IRS, and pay tax on the net rental income by filing a US tax return at the end of the year.

  6. Hi, we are seeking an accountant to help us file US taxes for income received from our rental properties in Florida.

    1. Hi Linda,

      Thank you for reaching out. I would be pleased to prepare a US tax return for you in respect of your US rental property. Please complete this checklist and return it to me along with a spreadsheet summarizing the rental income and expenses for each US property for the year. http://madanca.com/us-non-resident-personal-tax-return-checklist/

      My fee to file a US 1040-NR Return for one owner of a US rental property is $300 and if there are two owners the total fee is $450. I charge an extra $100 for each additional property. All prices are in Canadian dollars. Disbursements and taxes are extra. Please let me know if you have any questions.

  7. Hi Guys,

    I am starting up a investment firm here in Canada and looking to start purchasing properties in the US.

    I was wondering if you can guide me through this journey both on the accounting and business structure side?

    1. Hi Ahmed,
      Thank you for your email. I can certainly provide the tax advice that you require, with the goal of avoiding double taxation and minimizing your potential liability. I suggest that we start with a 30-minute consultation for a fee of $110 + tax so that I can properly answer your questions. To book an appointment with me, please contact my assistant Sade: sade@madanca.com I look forward to hearing from you.

  8. Hi, I live in US and I’m selling my apartment in Toronto, ON. It used to be my principal residence from 2014 till I moved to US in 2017, and I rented it out since.
    I’ve filed my rental taxes under section 216 and remitted the proper taxes every month. Now I’m trying to get the sales tax sorted out. Would you be able to help me with this and what would be the expense that I’m looking at.
    Thank you.

    1. Hi Ahmad,

      The following are the tax implications for you if you sell your Toronto property:
      1. Your lawyer will hold-back 25% of the sales proceeds in his Trust Account.
      2. You must file an application for a Certificate of Compliance in respect of the sale of your Toronto property. With this application, you will include a payment to the CRA for 25% of the capital gain. (Note: The adjusted cost basis is equal to the fair market value of your property on the date that it was converted from a principal residence into a rental property).
      3. The CRA will issue a Clearance Certificate after processing the application and collecting the payment of tax.
      4. You will provide a copy of the Clearance Certificate to your lawyer
      5. Your lawyer will release the hold-back of tax to you (see step 1 above)
      6. A Section 116 Non-Resident Return needs to be filed with the CRA to report the sale of the property

      My fee to prepare an Application for a Certificate of Compliance is $900 + disbursements. Furthermore, my fee to file a Section 116 Non-Resident Return is $250 + disbursements.


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