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If you have a question, you may find your answer here in our FAQ section. Click on the topics (listed in alphabetic order) below to view the subtopics (if any), questions and answers. Post-publication changes in legislation, government policies, or the interpretation of the law could affect the validity of the information contained herein. Answers provided are current as of the date on which they are added.

Answers to these questions are not an exhaustive treatment or analysis of such subject(s) and related law. Accordingly, information herein is not intended to constitute accounting, tax, legal, investment, consulting or other professional advice or services. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser. Use of information is at your own risk.

Frequently Asked Questions on Rental Income Earned in Canada

  1. I am not a Canadian tax resident. I earn rental income in Canada. Do I need to pay Canadian tax?
  2. Yes, non-tax residents are required to pay 25% on amounts they receive as rental income on real property in Canada or as timber royalties earned in Canada as income tax. This 25% tax is usually considered the final tax liability. However, a non-resident can elect to pay tax on the net income instead of the gross income by filing an income tax return under Section 216 of the Income Tax Act. In most cases, the tax payable on an income tax return filed under section 216 is less than the 25% tax withheld on the gross rental income because rental expenses become deductible. However, you need an agent (known as NR6 agent named after the form NR6) to undertake filing a Section 216 income tax return which is due for filing by June 30. Any tax owed is due on April 30.

    [This answer was added on May 6, 2009.]

  3. I paid a special assessment for repair on my rental condo. Is this payment deductible against my rental income?
  4. No. Despite the nature of the special assessment is for repair, CRA takes the position that major repair will enhance the economic life of the building and therefore is of a capital nature. At the point of writing, we are not aware that CRA's position is successfully challenged in court.

    [This answer was added on May 8, 2009.]

[This page was added on April 6, 2009, last revised on May 8, 2009.]