Canadian Receiving Rental Income From U.S. Real Property

Foreign Property Owner’s Tax Return Responsibility During Ownership and Rental of Real Property Interest

First the Canadian owner of US Real Property needs to determine whether the rental income will be taxed as investment income through withholding, or on a net income basis as “ effectively connected with a U.S. trade or business,” without withholding (although the owner may have to file estimated tax returns).  Rental income from real property located in the United States Read more

A Tax Guide for Canadians Buying US Property

Canadians Buying US Real Estate

If you are a Canadian resident intending to buy a residential property in the United States it is important that you are aware of the following tax implications particularly if you intend to rent it for any period of time during the year.

A non-US resident owning a US residential rental property may elect either of the following options:


This option makes little economic sense.


In order to avoid the 30% gross revenue tax on your US property you must file form W8-ECI (Certificate Read more

Tax Planning on Rental properties both in Canada and US

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The tips of buying rental property

If you borrow money to buy or repair a rental property, make sure you arrange things so that the interest on the loan is tax deductible. That means keeping mortgages and lines of credit for the rental property completely separate from loans taken out to buy or improve your principal residence, which are not tax deductible.

Say you have a $100,000 mortgage on your home Read more

Ownership of Rental Property Matters Your Taxes

Real property is considered an important if not essential part of a good investment strategy. When you acquire and own rental property specifically, you need to consider the tax implications of this type of investment.

Rental property may be acquired by an individual, acting alone or as a co-owner, or by a partnership, a corporation or a trust. Each of these types of ownership has advantages and drawbacks for Canadian residents.

For more tax tips on  Read more

Advantageous of having a rental property held by a corporation

Having a residential rental property held by a corporation could prove advantageous in certain cases, specifically:

  • Where the owner has substantial taxable income
    From a tax standpoint, while it is true that the tax rates are similar (46.57% business tax rate vs. the individual’s maximum marginal tax rate of 48.2 %); this approach could make it possible to remortgage the residential rental property and ensure that the all of the interest is deductible by the corporation.
  • Where the owner has low taxable income
    Transferring residential rental property to a corporation reduces the taxpayer’s taxable income , and could make it possible for the taxpayer to benefit from certain tax incentives (GST/HST, child assistance, child tax benefit, reduction of the old age security pension refund, increase of certain credits based on family income, etc.).
  • Asset safeguarding
    Holding residential rental property through a corporation provides some protection against any actions initiated by the taxpayer’s creditors.

Transfer of personally-owned property

Moreover, you can transfer residential rental property that you currently own personally to a corporation without triggering any immediate tax impact using the tax rollover rules. At the time of the transfer, the corporation can issue a demand note to the former owner of the residential rental property equal to the cost paid by the owner for the Read more