Real Estate Tax Archives

US Taxes Payable by Canadians on US Real Estate Sales

Following the crash of the real estate market in 2008, US real estate has been an attractive investment opportunity for investors from all over the world, including Canadians. Although the old adage of “real estate prices always go up” has been proven wrong, one of the major benefits of owning real property is still the … Continue reading

The Best Property Managers Are Accomplished Jugglers

Even though real estate investing is not the “cash cow” that some promoters would have you believe it is, rental properties can provide a careful investor with a very nice income stream and a solid real estate portfolio. Real Estate Investing for Dummies has a “Cheat Sheet” that provides some proven tips for success. Becoming … Continue reading

New Year Prediction for Property Sale in Canada

The Prairie sales forecast is also on the rise. Alberta and British Columbia are the provinces according to CREA, where its annual sales will supposedly rise as compared to the previous year. Prediction for National Activity: Next year, 2014, will witness national activity reach 465,600 units with a 3.5% rebound while keeping within its average … Continue reading

Non-Residents Earning Rental Income from Real Estate in Canada

Non Residents of Canada earning rental income from Canadian real estate have Canadian tax obligations. This article identifies the different forms and returns that can be or are mandatory to be filed with the CRA regarding the rental income earned. Background When non-residents receive rental income from real property in Canada, taxes on the income … Continue reading

Real Estate Sales & Taxation

If you own a rental property or a real estate investment in Canada, and have sold or are thinking of selling, then it is very important that you read this article because it provides helpful tax tips that can save you $$$ thousands.

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 … Continue reading

Property Management Tips for Real Estate Investors

My name is Allan Madan, your trusted accountant. I am also a real estate investor in the United States, Canada, and India, and I would like to share my experiences on the best practices for property management tips with you. This article is called ‘Property Management Tips for Real Estate Investors’.

Property Management Tips for Real Estate Investors Watch Video

My name is Allan Madan, your trusted accountant. I am also a real estate investor

When a rental property is converted into a principal residence, are there any tax implications?

When there is change in use of real estate (ex. from income-producing to personal-use), a deemed disposition occurs at fair market value (FMV). This can result in a capital gain (i.e. FMV less Adjusted Cost Base). However, in certain situations, an election under subsection 45(3) can be made to defer the capital gain by reporting … Continue reading

I’m a non-resident owning rental property in Canada. I’m confused between the NR4 slip, and NR6 form.

By filling form NR6 with the CRA, your agent/tenant will only withhold 25% of the net amount of your monthly rent, versus 25% of the gross amount of your monthly rent. The NR6 form should be filed at the end of the year for the following year. For example, if your tenant pays you $3,000 … Continue reading

What are my tax obligations if I am a non-resident holding rental property?

If you earn rental income from Canadian real property, you must file a Section 216 return. As a non-resident, a representative in Canada (i.e.: your tenant or property manager) will have to withhold 25% of the gross rental income paid to you and remit this amount to the CRA. The CRA will subsequently issue an … 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?

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 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

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

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

Tag: Real Estate Tax