Tax Alert For Non Canadian Resident Owners of Canadian Rental Properties
Canadian tax law requires that non-Canadian residents file annual income tax returns and pay income tax on revenue earned from Canadian-based sources (in this case, any Canadian rental property).
Rental income is specifically listed under Part XIII of the Candian Income Tax Act, and dictates that your rental income be subject to non-resident withholding tax equivalent to 25% of the Gross amount transacted.
For more details, please consult your accountant or refer to the Canadian Revenue Agency at: http://www.cra-arc.gc.ca/tx/nnrsdnts/bsnss/menu-eng.html
Three Options to Address This Tax Issue:
1 - alluraDirect.com will remit 25% of your rental income to CRA and you can claim it back when you file your annual income tax return , or
2 - Designate a Canadian Agent to accept rental payments on your behalf to a bank account that you do not have access to. The Agent will be required to sign an agreement with alluraDirect.com stating their responsibility for your tax obligations, or
3- Reduce your non-resident withholding tax (often reduced to nothing) by filing an NR6 form with our partner accounting company.
alluraDirect.com can be held liable by CRA for your non-resident withholding tax should you fail to file an income tax return.
As result, we are either required to withold and remit 25% of your transacted rent through our credit card processing system (you claim it back when you file an income tax return), or can opt to annually submit an NR6 form to reduce your non-resident withholding tax (usually reduced to zero).
Our Solution:
alluraDirect.com offers the NR Tax Program’ to reduce the withholding amount. The program is independently administered through D & H Group for your privacy. (Minimal accounting fees will apply along with the requirement to use our approved accounting firm to perform your tax filing).
This makes it easy to keep more of your money and remain tax compliant!
For more information about this program and issue before joining alluraDirect.com, please contact accounts@alluradirect.com to speak to our Controller & Operations Manager, who is a fully qualified and experienced CGA. Program information is also instantly available once you list your property.