If you are a non-resident in Canada but you have a rental property in Canada then it is very important that you understand the tax implications of your non-resident status. Most non-residents want to buy a rental property in Canada because of the good real estate market that Canadians boast. If you are a non-resident and have a rental property in Canada please keep on reading.
Let’s look at the tax implications and due dates which are important for you if you are a non-resident with rental property in Canada.
1. Withholding Tax: This is very important point to keep in mind is withholding tax. You have to remit 25% of the gross rent you collect to the CRA. For example, if you collect $10,000 rent for January, then you have to remit $2,500 to the CRA before February 15th.
2. NR4 Pro Forma: To apply this 25%, an accountant or property manager needs to prepare your NR4 Pro Forma and send it to the CRA Before March 31st of every year. Once the NR4 pro forma is prepared and sent out to CRA, the CRA will issue an NR4 slip.
NR4 Slip – This slip reports the total rent paid, and the amount of taxes withheld and remitted to the CRA for the calendar year.
3. The NR4 slip contains the information of your total gross rent collected and the total amount remitted to the CRA. Once the CRA issues the slip, then your tax return can be prepared and this NR4 slip. This slip reports the total rent paid, and the amount of taxes withheld and remitted to the CRA for the calendar year. This slip is included with the Non-Resident Rental Return (Section 216 Income Tax Return), filed annually.
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Refinity Homes (StanMark Inc.) will not be held liable for any problems that arise from the usage of the information provided on this page.