Foreign landlord fails to pay taxes, CRA goes after tenant

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A Montreal tenant was audited and ordered to pay the tax he had failed to withhold on the monthly rent to his non-resident landlord

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.

“I’m in the real estate business, and I don’t even know about it,” said Mr. Goldman. “In my opinion, 99.99 per cent of all tenants in Canada are unaware of this, and it is the responsibility of the CRA to inform the renting public that they could be on the hook for this withholding tax.” Ron Usher, long-time lawyer and general counsel for The Society of Notaries Public and visiting professor at Simon Fraser University, said he was taken aback by the Quebec case when he learned about it last year. He wonders how many non-resident landlords are not paying the tax.

Lawyer Michael Drouillard is vice chair of Landlord BC and specialist in tenancy law. Mr. Drouillard said he knew about the potential for tenant liability long ago when he was a property manager, but he was still surprised to see a tenant held liable.“I just don’t think it’s very nice for CRA to pursue a residential tenant who has no idea. You’re not told at any time that you have this lingering liability, and this high degree of diligence.

“It was never brought to my attention, and I could almost guarantee that nobody would know about that,” said Ms. Makulkina.

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

 

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