Quote:
Originally Posted by Traum
Quick question:
My cousin is a Canadian citizen with non-resident status, and she currently does not file a Canadian income tax return. Instead, she is currently working in Asia, and is considering to buy a place in (Metro) Vancouver -- both for medium term investment purposes and for generating income (ie. plan on renting it out for the time being). She may or may not move back to Vancouver in the future.
1) If she purchases a property, does she have to pay foreign home owner tax?
2) What are the tax implications when she starts renting the place out? Obviously, she will have to start filing (Canadian) income tax returns. My biggest concern and the question that I do not have the answer to is -- would she have to start reporting her Asia income, and get (Canadian) taxed on that as well?
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Quote:
Originally Posted by Great68
To answer your second question, to be charged Canadian tax on her Asian income she would have to be considered a "Factual Resident" of Canada defined as "Significant residential ties" to Canada. I'm not sure if her buying a condo would classify her as Factual Resident. It's possible, I'd call CRA to get the right answer. Here's some info on it: 6 must-know tax facts for Canadians earning abroad | CBC News |
Just to add, an individual can also be a "Deemed Resident" even if they are not a "Factual Resident", in which case, world income would need to be reported. Whether an individual is considered to have residential ties depends on the circumstances of the individual and the actual answer can vary.
A non-resident who receives rental income does not automatically mean she would be required to file a return, as the tenant may be required to withhold (and remit) the tax directly.
If she purchases a property here, she should get a residency determination (at that time).