Canada’s tax agency will not order tenants to pay any taxes owed by their foreign landlords, says federal Minister of National Revenue Marie-Claude Bibeau.
“I want to reassure Canadians that the Canada Revenue Agency does not intend to collect any portion of any non-resident landlord’s unpaid taxes from individual tenants,” Ms. Bibeau said in her statement posted on X. “It is incorrect to state otherwise.”
‘To Provide Absolute Clarity’
Ms. Bibeau said the case at the Tax Court of Canada was “an extremely rare situation.”
“This law has existed for nearly a century, and there is not a single instance of an assessment made to an individual tenant in the last decade,” she said.
“The CRA does not expect individual tenants to withhold 25% of the rent from their landlords.”
“If you receive rental income from real or immovable property in Canada, the payer (such as the tenant) or agent (such as the property manager) must withhold non-resident tax of 25% on the gross rental income paid or credited to you,” it said on a federal government webpage indicating the “date modified” as Jan. 23, 2024.
In a statement provided to media outlets on May 17, the CRA said the 25 percent remittance rule will only apply when the landlord and tenant have a “business relationship.”
“In most situations involving rental income, the CRA’s practice is to engage with the landlord rather than the tenant. However, to ensure tax fairness the CRA would engage directly with a tenant where there is a business relationship between the tenant and the landlord,” the federal agency said.
The Epoch Times contacted the CRA to request specific examples but did not hear back by publication time.
Ms. Bibeau said in her May 17 statement that she is working with Finance Minister Chrystia Freeland “to provide absolute clarity on the law and to ensure that tenants have the certainty they need and deserve.”
“[B]ut I can assure Canadians that it does not, and will not, apply to them,” she added.
