If you are a non-tax resident, or part of the ownership of your house is held by a non-tax resident, then the rental income that is the non-tax resident's proportion of the ownership must be declared as a non-tax resident.
What is a non-tax resident?
Non-tax residents include but are not limited to
(1) New immigrants who have not lived in the city for 183 days in the current year
(2) International students who have not lived in the country for 183 days in a year
(3) Foreigners with income in Canada who have not lived in Canada for 183 days in that year on a visitor visa
(4) Former tax residents who have left Canada and whose spouse or dependents are no longer in Canada
(5) Former tax residents who have left Canada and whose spouses are temporarily residing in Canada
(6) Former tax residents who have left Canada but have businesses, investments or bank deposits in Canada
The most common situation when a non-tax resident and a tax resident jointly buy a house:
- International students (tax) and parents (overseas non-tax) jointly buy a house
- Brothers and sisters (both tax and non-tax) pool their money to buy a house together
but Not included A couple (one of whom is a tax payer and the other is not) jointly buys a house.
Withholding tax How to pay?
If the property is owned solely by a non-tax resident and is rented out after purchase (commonly seen by overseas buyers as an investment in real estate), the withholding tax that needs to be paid to the tax bureau every month needs to be calculated.
Calculation method :
Method 1: Directly pay the monthly gross rent income 25%;
Method 2: Submit NR6 application to CRA. The property owner only needs to pay the monthly Net rental income 25% This can significantly reduce the tax on rental income and increase the cash flow of renting out the house. (The second method is more complicated and you can ask an accountant for help)
Payment time : Pay the tax to the CRA online or by mail before the 15th of the next month. (Note! Pay on time every month. If you forget to pay or pay late, you will be charged interest by the CRA.)
Payment Account : NRK or NRF non-tax resident account number. Note that it is not an ITN or SIN account number (many customers cannot tell the difference, Individual Tax Number and Social Insurance Number are for residents, NRK and NRF are for non-tax residents, the two are different departments)
Customers often ask me, they don’t want to pay withholding tax every month, it’s too troublesome, can they just pay the tax in one lump sum when filing their taxes at the end of each year?
A: The IRS stipulates that withholding tax can be reported late for up to 2 years, but you need to explain why the late reporting is required. If it exceeds 2 years, you will receive a large bill from the IRS.
suggestion : According to the regulations of the tax bureau, paying withholding tax on time every month is responsible for property taxes and will also leave a good record with the tax bureau.
