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Canadian Renters Now Required to Collect Foreign Landlord's Taxes, Withhold Rent

17 points by luu 2y ago

deleted 2y ago
[deleted]
ranger_danger 2y ago
How can you owe taxes on something you don't own?
- tharmas 2y ago
  Its Canada. 40% of Federal MPs are landlords. Now you know why the govt loves immigration.
Ajay-p 2y ago
This is bizarre but maybe I see the reason why. If it's to restrain foreign ownership of rental properties, I don't think it's going to have much impact. Renters who want to live there bad enough will pay it, and I would not be surprised if some foreign owners will help with that process. On the other page.. If foreign landlords are suspected of not paying their full taxes, this is one way to increase a guarantee that the taxes will be paid.
- ranger_danger 2y ago
  I think if you're going to be paying the taxes you should also get ownership of the property.
- k0stas 2y ago
  > This is bizarre but maybe I see the reason why. If it's to restrain foreign ownership of rental properties. The reason is that the government wants its tax money. Since the cash flow is coming from the renter they are also responsible for it. There is a similar situation with employers who are responsible for remitting tax withholding even though it is the employee who owes the income tax.
  - tzs 2y ago
    How far does this extend? If a restaurant doesn't pay its taxes would the Canadian government go after the people who ate there for the money? They are the source of the restaurant's cash flow.
- snapplebobapple 2y ago
  It's more the CRA is too lazy and/or incompetent to successfully collect from foreigners and so they are forcing liability on the people paying (in this case the renter). I personally think this is bad precedent to set because it forces utterly excessive KYC requirements on renters. The government should be passing a law here to correct this to limit liability to a very narrow set of circumstances (In this case it would be something like if you pay rent via international money transfer out of the country you should have some responsibility to withhold a fixed percent here, otherwise it's not your problem) but they probably won't.
k0stas 2y ago
I think this Globe and Mail article about the recently publicized case to be better read: https://www.theglobeandmail.com/real-estate/article-montreal-tenant-forced-to-pay-his-landlords-taxes-offers-advice-to/ https://www.theglobeandmail.com/real-estate/article-montreal... (https://archive.is/fPNZT https://archive.is/fPNZT). The renter in this case was responsible even though he claimed he did not know his landlord was a non-resident since she left Canada during the time that he rented. The Canada Revenue Agency disputed that claim since "[the landlord's] phone number on the lease was an Italian phone number; she had used an Italian e-mail address to correspond with [the renter]." The landlord had also asked the renter to start paying her sister who was still in Canada before she left for Italy. I am curious about what would happen if the renter could genuinely establish that he did not know their landlord was a non-resident. Based on the defense lawyer's claim that "Whether the CRA could have collected the rent in some other way does not impact his liability under the law. The CRA and the Tax Court have to apply the law as it is written." [Note there is a mistake in this quote the CRA (Canada Revenue Agency) collects taxes not rent].
bryanlarsen 2y ago
This has been retracted: https://globalnews.ca/news/10503736/tenant-landlord-tax-rules-cra/ https://globalnews.ca/news/10503736/tenant-landlord-tax-rule...

17 points by luu 2y ago

deleted 2y ago

[deleted]

ranger_danger 2y ago

How can you owe taxes on something you don't own?

tharmas 2y ago
Its Canada. 40% of Federal MPs are landlords. Now you know why the govt loves immigration.

Ajay-p 2y ago

This is bizarre but maybe I see the reason why. If it's to restrain foreign ownership of rental properties, I don't think it's going to have much impact. Renters who want to live there bad enough will pay it, and I would not be surprised if some foreign owners will help with that process. On the other page.. If foreign landlords are suspected of not paying their full taxes, this is one way to increase a guarantee that the taxes will be paid.

ranger_danger 2y ago
I think if you're going to be paying the taxes you should also get ownership of the property.
k0stas 2y ago
> This is bizarre but maybe I see the reason why. If it's to restrain foreign ownership of rental properties. The reason is that the government wants its tax money. Since the cash flow is coming from the renter they are also responsible for it. There is a similar situation with employers who are responsible for remitting tax withholding even though it is the employee who owes the income tax.
- tzs 2y ago
  How far does this extend? If a restaurant doesn't pay its taxes would the Canadian government go after the people who ate there for the money? They are the source of the restaurant's cash flow.
snapplebobapple 2y ago
It's more the CRA is too lazy and/or incompetent to successfully collect from foreigners and so they are forcing liability on the people paying (in this case the renter). I personally think this is bad precedent to set because it forces utterly excessive KYC requirements on renters. The government should be passing a law here to correct this to limit liability to a very narrow set of circumstances (In this case it would be something like if you pay rent via international money transfer out of the country you should have some responsibility to withhold a fixed percent here, otherwise it's not your problem) but they probably won't.

k0stas 2y ago

I think this Globe and Mail article about the recently publicized case to be better read: https://www.theglobeandmail.com/real-estate/article-montreal-tenant-forced-to-pay-his-landlords-taxes-offers-advice-to/ https://www.theglobeandmail.com/real-estate/article-montreal... (https://archive.is/fPNZT https://archive.is/fPNZT). The renter in this case was responsible even though he claimed he did not know his landlord was a non-resident since she left Canada during the time that he rented. The Canada Revenue Agency disputed that claim since "[the landlord's] phone number on the lease was an Italian phone number; she had used an Italian e-mail address to correspond with [the renter]." The landlord had also asked the renter to start paying her sister who was still in Canada before she left for Italy. I am curious about what would happen if the renter could genuinely establish that he did not know their landlord was a non-resident. Based on the defense lawyer's claim that "Whether the CRA could have collected the rent in some other way does not impact his liability under the law. The CRA and the Tax Court have to apply the law as it is written." [Note there is a mistake in this quote the CRA (Canada Revenue Agency) collects taxes not rent].

bryanlarsen 2y ago

This has been retracted: https://globalnews.ca/news/10503736/tenant-landlord-tax-rules-cra/ https://globalnews.ca/news/10503736/tenant-landlord-tax-rule...