Co-sign on mortgage while remaining non-ordinary resident

[jy22yang]

Hello everyone, due to my mother's financial situation I am planning to co-sign on a mortgage in order for her to qualify for a mortgage. I am trying to figure out whether or not if I be a minimum owner of 1%, if this will affect my tax residency while i reside in America -- I am currently on a TN and have been working in the US for the last 2.5 years. Is anyone aware of the tax consequences of doing this?

As an aside, at what point will my tax residency be questioned in Canada? Do I need to continue filing nonresident taxes to Canada?

[nelsona]

This will not make you resident, since you do not live there. Even if you owned the house 100%. In any event, co-signing doesn;t make you an owner at all. She would need to transfer all or part of the ownership to you, which is differnt.

You only file non-resisnt tax return if you have Cdn-source income. Otherwise, your departure return filed when you left is the last one you file until you re-establish Cdn residential ties.

[jy22yang]

Thanks for the response. So in the event that I take on a small portion of the ownership, such as 1% -- would you happen to know if this counts as a 'significant residential tie? I find the information in the Income Tax Folio S5-F1-C1 [1] quite unclear - as it seems as though it might count as a potential dwelling if my mother is living in it.


[1] https://www.canada.ca/en/revenue-agency ... tatus.html

[nelsona]

Again, you don't live there. Even owning an empty cottage 100% still wouldn't make you resident, because you wouldn't be living there.

[Meritekah]

As for filing taxes in Canada, it's essential to understand when your tax residency there might be questioned. Generally, if you have significant ties to Canada, such as a permanent home or strong family connections, your residency might still be considered Canadian. Filing nonresident taxes to Canada is a prudent approach until you're certain about your residency status.
Lastly, for all financial matters, including mortgages and taxes, consulting with a Mortgage Broker in Beverley https://hullmoneyman.com/mortgage-broker-in-beverley/ can be a valuable step. They can offer insights and connect you with the right professionals who can provide expert advice tailored to your specific situation.