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Basic Things you need to Know in Filing for Property Tax

Updated: May 18, 2023

Understanding the Canadian tax regulations related to real estate investments may make owning property in Canada advantageous. Purchasing and holding real estate in Canada does not need a place of residence or citizenship. Temporarily, you may live in a Canadian dwelling, but you must meet immigration conditions. Ownership of rental properties in Canada is permitted for non-residents. However, they must submit yearly tax filings with the Canada Revenue Agency (CRA).

Property Taxes

Many of our most apparent services, such as water, snow removal, waste collection, police, and fire protection, are provided by municipal governments. Municipal services and finance are handled by provincial governments. Therefore there is some variation in the mix of services.

For most families, property tax is only one of the three significant taxes they pay. The tax rate is multiplied by the property's assessed value to arrive at the total tax bill. Ordinarily, the tax burden on a home is lower than that of a business. In Ontario, for instance, the residential rate is 85% of the non-residential rate.

Filing and reporting requirements

25% of your Rental Income

  • The payer, such as the renter, or agent, must withhold non-resident tax at the rate of 25% on the gross rental income when you receive rental income from real or immovable property in Canada.

  • As detailed in Guide T4061, NR4: Non-Resident Tax Withholding, Remitting, and Reporting, the payer must submit the CRA and NR4 information return.

Section 216 of the Income Tax Act

  • This allows you to declare rental income from real or immovable property in Canada on a separate Canadian tax return if you so choose.

  • Instead of paying tax on the gross amount, you may deduct the net rental income from Canadian sources. Some or all non-resident tax withheld may also be refunded to you.

  • Your net rental income might be subject to tax withholding instead of the gross amount.

  • You must submit Form NR6, to File an Income Tax Return by a Non-Person Receiver of Rent from Real or Immovable Property or Receiving a Timber Royalty, to your agent.

  • This Canadian resident acts on your behalf about your Canadian rental income as a part of this procedure. Ideally, you should submit to the CRA no later than the first year, whichever comes first.

Non-resident tax

  • Can be withheld from your rental income at a rate of 25% when the CRA accepts your Form NR6.

  • The tax due to the Canada Revenue Agency (CRA) must be paid by your agent no later than the 15th day of the month following the month in which you receive your rental revenue.

  • Section 216 requires all Canadian rental income and costs to be reported on a single section 216 return if you have revenue from more than one rental property in Canada.


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