Tag: Real Estate Tax

If I purchase a rental property, and I’ve never owned a primary residence, can I utilize the First time Home Buyers Plan?

Unfortunately the answer is No. One of the conditions to qualify for the First Time Home Buyers Plan is that you intend to occupy the home as your principal residence no later than one year after buying, or building it. Since your intention of buying the property is to generate rental income, you do not … Continue reading If I purchase a rental property, and I’ve never owned a primary residence, can I utilize the First time Home Buyers Plan?

If I am a non-resident of Canada, and I sell Canadian real estate, what is the procedure for filing tax returns, and paying taxes?

As a non-resident individual who sells a property in Canada, the purchaser of your property will be required to withhold 25% of the proceeds (selling price) at the time of sale ‘disposition’ (which will be given back to you). This is to give non-residents an incentive to pay tax on the capital gain/recapture that may … Continue reading If I am a non-resident of Canada, and I sell Canadian real estate, what is the procedure for filing tax returns, and paying taxes?

I’m renting out the basement of my home, and collecting rent. Should I report this on my tax return?

Definitely, yes. As per the Income Tax Act this is considered taxable income, and should be reported on your personal tax return each year. In an audit, should the Canada Revenue Agency (“CRA”) request to see your personal bank statements, the monthly rent deposits will raise a red flag, if the rental income is not … Continue reading I’m renting out the basement of my home, and collecting rent. Should I report this on my tax return?

My bank won’t approve a mortgage to my corporation for the purchase of an investment property. Can I use a bare trust?

Bare trusts are often used in financing transactions. Real estate investors prefer to purchase properties in the name of their corporation for tax reasons. Therefore, consider using a bare trust if your bank won’t loan money to your corporation, but is willing to provide you with a personal mortgage for the purchase of an investment … Continue reading My bank won’t approve a mortgage to my corporation for the purchase of an investment property. Can I use a bare trust?

What is the GST/HST of a new residential rental property (NRRP) rebate?

If you paid GST/HST on the purchase of a new residential rental property or substantially renovated residential rental property, you may qualify for the GST/HST NRRP rebate. If your property meets the definition of a qualifying residential unit, this rebate will allow you to receive all or a portion of the GST/HST paid on the … Continue reading What is the GST/HST of a new residential rental property (NRRP) rebate?

If I rent out part of my home while still living in it, are there any tax consequences?

If while living in your home (referred to as a principal residence) you rent out a part of it, there will be tax consequences. For tax purposes, when a principal residence is turned into a rental property, a change-in-use for tax purposes has occurred. A change-in-use means that the house will be considered to have … Continue reading If I rent out part of my home while still living in it, are there any tax consequences?

I have a rental property and for few months of this year, there were no tenants. Can I still claim rental expenses for those months on my tax return?

You can still claim rental expenses for those months as long as you were actively seeking for new tenants and the space was available for rent during the period.    

What happens if I filed an NR6 that was approved by the CRA but I did not file the section 216 return by the deadline of June 30th?

By way of background, the Section 216 Tax Return reports the net rental profits (i.e. revenues – expenses) earned on an Canadian rental property, which is owned by a Non-resident of Canada. The NR6 Form is a waiver that reduces the withholding tax rate of 25% on gross rents received by the landlord to only … Continue reading What happens if I filed an NR6 that was approved by the CRA but I did not file the section 216 return by the deadline of June 30th?

Can a non-resident who owns a Canadian rental property choose a tenant to act as his agent in Canada?

No, a tenant who is renting the property (i.e. the payer) cannot act as the agent. A professional rental agent (e.g. property manager) or a family member/friend can be chosen to perform the responsibilities of the agent as long as the individual is a Canadian resident.

How does the Home Buyers Plan repayment work?

You have to pay back the amount withdrawn from your RRSP under the HBP over 15 years beginning the second year after the year of withdrawal. Each repayment is 1/15th of the total amount withdrawn. To make a repayment under the HBP, you must make contributions to your RRSPs in the year the repayment is … Continue reading How does the Home Buyers Plan repayment work?

Do I have to pay tax on capital gains on the sale of my home?

When a principal residence is sold, the gain is not taxable if it has been the person’s principal residence for the whole time it has been owned. There is a principal residence exemption that eliminates the gain. Also, if the property was your principal residence the whole time it was owned you do not need … Continue reading Do I have to pay tax on capital gains on the sale of my home?

What’s the tax payable by non-residents on the sale of Canadian real estate?

If real estate is sold by a non-resident, 25% of the gross sale proceeds is obligated to be withheld by the purchaser and remitted to the Canada Revenue Agency (CRA). The withholding tax amount can be reduced if the vendor acquires a Certificate of Compliance from CRA on time. By filing the form, the withholding … Continue reading What’s the tax payable by non-residents on the sale of Canadian real estate?

Can I claim motor vehicle expenses towards rental property income?

1. If you own at one rental property you can deduct reasonable motor vehicle expenses if you meet all the following conditions: you receive income from only one rental property that is in the general area where you live; you personally do part, or all, of the necessary repairs and maintenance on the property; and … Continue reading Can I claim motor vehicle expenses towards rental property income?

I am selling a rental property that I owned, how will my capital gain being calculated?

Your capital gain will be calculated based on the difference between the adjusted cost base and the selling price. Note that only 50% of the gain is taxable. Normally, the adjusted cost base of the property is the original purchase price plus other costs incurred to make the acquisition, such costs are brokerage fees, installation … Continue reading I am selling a rental property that I owned, how will my capital gain being calculated?

Do I have to pay capital gains tax if I turn my house into a rental property?

When you change your home from your primary residence into a rental property, your home is deemed to be sold at its fair market value at the date of the change. The capital gain is equal to the excess of the fair market value of your home at the date of the conversion over the … Continue reading Do I have to pay capital gains tax if I turn my house into a rental property?
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