As a non-resident with rental property in Canada, am I required to remit 25% to the CRA?

I am a non-resident of Canada and I have a rental property in Canada. I have recently found out that I am required to remit 25% of the gross rent to the CRA as a withholding tax on a monthly basis. Can I make this payment myself?

As per the CRA ruling, an individual who resides within Canada must remit the 25% withholding tax. Normally, it should be your tenant or your property manager. A non-resident cannot do this.

The owners who were removed from title are deemed to have disposed of their share of the house at the fair market value of the time. They will calculate a gain on their portion, based on their original cost.

What happens when I or my family members are removed from title of a house? The existing owners’ cost will increase by the fair market value of the house at the time.

For example, Tyler and Sue and Sue’s parents are on title of the house. They all bought their house for $90,000 each. In 2004, when the market value is $500,000, the parents are removed from title. They dispose their house for $250,000. Their gain is $140,000.

Tyler and Sue’s new cost of the home is $370,000 ($180,000 + $250,000).

ABOUT THE AUTHOR

ALLAN MADAN

CA.CPA.CGA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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