How Do Non-Residents Pay Property Tax in Canada?

If you are not a resident of Canada, but own property in the country, you will be subject to different tax laws and rates than Canadian citizens. But how does the process work, and how do you pay the taxes?

Whether you are renting out the property or it is vacant, you have tax obligations that must be understood and paid, or else you will face legal consequences.

Understanding Section 216 of the Income Tax Act

Due to a high amount of foreign ownership across Canada, the government has introduced a national tax that targets non-residents.

If you own a property in Canada as a non-resident and wish to rent it out legally for income, there are a few criteria to meet. First, you must work with a local property management company. Second, you must withhold a non-resident tax of 25% on the gross rental income paid or credited to you.

To pay the tax, you file a T4058 Non-Residents and Income Tax form.

The Speculation and Vacancy Tax

If you own a home in British Columbia but do not live in it, you will be subject to the Speculation and Vacancy Tax. Non-residents are required to pay a 3% tax on the assessed value of their property annually.

You can pay the empty home tax online, by phone, or by mail through the Vancouver (or another local municipality) website.

These are two of the main ways non-residents pay taxes on their property in Canada, but there are other tax obligations. To fully understand your taxes as a non-resident, schedule an appointment with the HWGCA office.

Located in Surrey (Cloverdale), British Columbia, since 1971, HWG, Chartered Professional Accountants proudly helps clients throughout the Lower Mainland and across Canada.

Our team of chartered professional accountants provides helpful business and personal tax services. Our continued growth proves the success of our client relationships.