Canadian Rental withholding while on TN

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ImpactSquad
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Joined: Tue Jan 24, 2023 2:53 pm

Canadian Rental withholding while on TN

Post by ImpactSquad »

Team,

Great content on this site and thanks to all who contribute. My spouse and I left Canada in Aug 2022 and moved to US on TD/TN status. We rented our house in Canada from Aug. Question I have: From when should my tenant start withholding the gross rent to CRA? We have not filed our returns yet, should we wait for CRA to declare NR status first or we have to start withholding regardless?
ImpactSquad
Posts: 2
Joined: Tue Jan 24, 2023 2:53 pm

Re: Canadian Rental withholding while on TN

Post by ImpactSquad »

Anyone with a response to this? Thank you.
nelsona
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Re: Canadian Rental withholding while on TN

Post by nelsona »

The tenant or an agent should be remitting since last august. YOU declare yourself non-resident, not CRA.

You will have interest to pay on the missing remittances.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ND
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Joined: Thu Feb 21, 2013 5:28 pm

Re: Canadian Rental withholding while on TN

Post by ND »

Look into 216 T1, electing under section 216 allows you to pay tax on your net Canadian-source rental income instead of the gross amount.

You may owe zero tax on this basis and thus zero interest.

If you elect under section 216, you can elect to have tax withheld on your net rental income instead of the gross amount.

To have non-resident tax withheld on your net rental income, you have to complete Form NR6, Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent from Real or Immovable Property or Receiving a Timber Royalty, and send it to the CRA for approval.

https://www.canada.ca/en/revenue-agency ... n-216.html
nelsona
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Re: Canadian Rental withholding while on TN

Post by nelsona »

Until an NR6 is approved, 25% withholding on gross applies, with interest (and perhaps) penalties incurred monthly.

NR6's take a while to process, but should definitely be submitted.'
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
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Re: Canadian Rental withholding while on TN

Post by nelsona »

Sorry, one has 18 months to file 216 to determine final tax. so the NR6 should be approved by then, and as ND says, if no tax is owed, there will be no interest charges. For 2022 however, this would mean that your rental expenses would have to exceed your income.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ND
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Joined: Thu Feb 21, 2013 5:28 pm

Re: Canadian Rental withholding while on TN

Post by ND »

FYI You have to file the NR4 information return and give the recipients their NR4 slips on or before the last day of March following the calendar year to which the information return applies (in the case of an estate or trust, no later than 90 days after the end of the estate’s or trust’s tax year).
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