What is the Rental Income tax rate?
Non-residents of Canada with Rental income from Real Property in Canada are subject to 25 per cent non-resident tax at source. The amount can be reduced or eliminated if certain elections are made or if a tax return is filed.
As a non-resident in Canada, should I pay taxes and file tax return?
The rental income derived by non-resident individuals is subject to special 25 per cent non-resident income tax applied at source. The amount could be reduced or eliminated if certain elections are made or if a tax return is filed.
What are the most common deductible rental expenses?
You can claim any reasonable expenses related to your rental property but only for the period your property was rented or available for rent. Expenses could include but are not limited to:
- Advertising
- Insurance
- Interest and bank charges
- Maintenance and repairs
- Management and administration fees
- Legal, accounting, and other professional or consulting fees
- Property taxes
- Travel
- Utilities
- Condo Fees
What are the required documents for filing rental income tax return?
You will generally need all invoices, receipts, contracts or any other supporting documents and statements showing your rental income received during the tax year. Some examples are NR4 slip or Form T776 - Statement of Real Estate Rentals; or Slip T5013 or T5013A - Statement of Partnership Income if acting as a partnership.
How to report current and capital expenses and what is the difference?
Generally, any reasonable expenses incurred to earn rental income can be deducted. The expenses are separated in two groups – capital and current expenses.
The capital expenses are added to the basis of your property and are subject to depreciation.
The current expenses are deducted on your income tax return for the year actually paid.
Are capital gains derived from a disposition of Real Property taxable in Canada?
The Capital Gains derived from disposition of assets in Canada are part of the gross income of the individual. The disposition of both residential real estate and properties held for business (including rent or lease) are subject to reporting. The 25 per cent non-resident income tax rate will be applied at source.
What is an Individual Tax Number (ITN)?
An ITN is a nine-digit number issued mainly to non-resident individuals who need a tax identification number and are ineligible to obtain a Social Insurance Number (SIN).
Are there any restrictions on non-residents when purchasing property in Canada?
Most Canadian provinces pose no restrictions regarding residency or citizenship for buying and owning property in Canada. Manitoba, Alberta and Saskatchewan impose some limitations towards the size of the land non-resident may buy.
Am I obligated to apply for a Canadian tax number if I’m treated as non-resident?
You will need an individual tax number (ITN) to file your tax return, if you have not been assigned a Social Insurance Number (SIN). We will assist you file and obtain your ITN.
