Episode 033 – Tax Considerations For Foreigners Buying Canadian Real Estate

TaxBreaks

In our firm’s latest podcast, Kenneth Keung and Kim G C Moody discuss tax issues that need to be considered when non-residents of Canada purchase Canadian real estate. Specifically, Kenneth and Kim discuss:

• Some recent legislative changes that have impacted the ability of or have consequential impacts such as a ban on foreigners from buying Canadian real estate from January 1, 2023 – December 31, 2024, the Underused Housing Tax Act (and its onerous filing requirements and penalties) and various vacancy taxes in certain municipalities across Canada.

• What legal form should be considered when purchasing property in Canada?

• If the Canadian property will be rented out, what are some of the tax issues that need to be considered (Part XIII withholding requirements, section 216 reporting)?

• If the Canadian property is sold, what are some of the tax, withholding and reporting requirements (section 116 requirements)?

• The surprising result when personal-use Canadian real estate property is acquired by a foreigner through a foreign corporation (subsection 15(1) in conjunction with subsection 214(3) resulting in a withholding tax remittance requirement) and the recent comments about this at the STEP Canada CRA RoundTable in June 2023.

Happy listening!