Foreign landlord fails to pay taxes, CRA goes after tenant

It was a Tax Court of Canada case last year that went mostly under the radar by all except for the legal community who were taken aback by its implications for renters.

It’s well known that non-resident owners have long had to pay withholding taxes on properties they either sell or rent out. However, few renters and few in thebusiness are aware that if those taxes don’t get paid, the tenant could be on the hook, said long-time realtor Lorne Goldman. Mr. Goldman sells properties to non-residents, and said realtors – and all renters and all small mom-and-pop landlords – should be formally educated on the risks to tenants.

“It sounds unfair for the tenants to be expected to handle this accounting rule,” said Mr. Oliver. “Can you imagine all the stress they are facing with having to hustle to pay their rents and the rising cost of living, and then to discover that there’s a whole complicated payments rule they are expected to manage?”

“We’re talking about tax residency, not physical residency. They could be in San Diego, but they really are a tax resident, so there’s this complication.” Tenant Mariana Makulkina, who found her apartment on Facebook Marketplace, says she only learned that her landlord lived overseas when she did her own research. She has a property manager, but without that third-party protection, she wouldn’t have known to ask her landlord when she signed the lease. Also, what landlord wants to be asked if they are paying taxes in Canada?

Vancouver Real Estate Real Estate Noastack Landlord Tenant Tax Canada Rent Cra Income Property Simon Fraser University Department Of Finance CRA

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