Non-Resident Property Owners and Non-Resident Taxes

It’s not uncommon for Canadian property owners to live outside the country. At Residential Leasing Group, we understand the stress of leaving your Calgary property behind. There’s a lot to consider, including non-resident taxes.

With over 20 years of non-resident experience, we can guide you through the step-by-step process to help alleviate any issues that can sometimes draw the attention of tax authorities subjecting you to further scrutiny.

If you own a rental property in Calgary and are considered a non-resident of Canada, there are specific Canada Revenue Agency (CRA) rules and regulations that must be followed.

As a non-resident of Canada, you are required to pay tax on income you receive from sources in Canada. The type of tax you pay and the requirements to file an income tax return depends on the type of income you receive. The most common type of Canadian income subject to tax is rental income.

To determine if you are a non-resident for tax purposes

In most situations, you are deemed a non-resident for tax purposes if you:

• Normally, customarily or routinely live in another country and are not considered a resident of Canada; or
• Do not have significant residential ties in Canada; and
• You live outside Canada throughout the tax year; or
• You stayed in Canada for less than 183 days in the tax year.

To calculate the number of days you stayed in Canada, include each day or part of a day that you stayed in Canada, including:

• Days you attended a Canadian university or college;
• Days you worked in Canada; and
• Any days or weekends you spent on vacation in Canada.

For more information on determining your non-resident status, visit the CRA website.

Rental income and non-resident tax

If you are considered a non-resident of Canada, and you receive rental income from real or immovable property in Canada, Residential Leasing Group is required by law to remit 25% of your gross monthly rent to the CRA on or before the 15th day of the month following the month the rental income is paid or credited to you.

However, the required 25% remittance can be reduced by completing form NR6 (“Undertaking To File An Income Tax Return By a Non-Resident Receiving Rent From A Real Property Or A Timber Royalty”.) By completing the NR6 form, you can elect to have tax withheld on your net rental income rather than the gross monthly rent.

RLG requires each of our property owners to complete the first three sections of the NR6 form, listed below:

Section 1

Your mailing address – This is your mailing address outside of Canada

Your Social Insurance Number or Individual Tax Number- If you do not have a Canadian Social Insurance Number, we can provide an application form to obtain an Individual Tax Number.

Your date of birth

Section 2

Rental Property Address – list only your rental properties managed by RLG

Estimated Gross Rental Revenue for the tax season for each

Note: the rent may fluctuate but an estimation of the total gross rental revenue for the tax season is required.

Section 3

Sign and Date the Undertaking By Non-Resident Section.

We also require you to provide an annual list of estimated allowable expenses. We will provide you with an allowable estimate expense sheet on which you can list the expenses you expect to incur for the taxation year.

NR6 Commonly Asked Questions:

While RLG is very knowledgeable in helping our property owners navigate the non-resident tax process, we strongly recommend that you also engage an accountant, preferably one that is well-versed with non-resident taxation. If you do not have an international tax accounting firm for all of your non-resident taxation requirements, RLG is pleased to recommend Compass Tax or The Expatriate Group.

If you have additional questions about non-resident tax, please don’t hesitate to contact us.