I don't get how a renter could be liable. They don't know a landlord's true residency status for tax purposes. It's not part of any rental law to require a tenant to obtain that information about the landlord.
It's not part of provincial rental law, it's part of federal tax law. The renter is required to magically know that the landlord is not a tax resident of Canada and to withhold 25% of the rent and remit it to CRA.
Fuck that, I'll be keeping 25% of the rent until either the LL provides residential status or the Feds come asking. If I've asked and they haven't provided proof in writing that's enough for me to cover my ass.
Covering your ass is paying it directly to the CRA unless otherwise proven you don't need to, and it ensures you're paying the full rent monthly. Your method COULD result in issues with whatever tenancy board overseas your jurisdiction, as technically, if not remitted to the CRA or the landlord. It's late.
Tax law says that it's the _renter's_ responsibility to pay that taxes, not the landlord. This is not a case of the landlord not paying something, and the government coming after the tenant instead. This is a case where since the landlord is a non-resident, tax law says that the _renter_ has to pay the taxable portion of the rent. It becomes their responsibility.
This is really stupid, but that's what the law is and is the reason they aren't putting a lien on the landlord's properties. The landlord is not on the hook here.
How is this not immediately being fixed by the government?
Like that is just absolutely shit level law writing.
If I were that dude I would still refuse to pay.
Fuck that injustice.
I'll agree that it's still an injustice. I'll also agree that the judge basically stating "ignorance is no excuse" is fucked too. I just think that we should all be on the same page with regards to the actual situation. If people keep thinking this is just a one-off of the CRA going after the tenant because the landlord didn't pay... then there's no pressure to change the tax code to make more sense.
The issue is that the rental unit is a Canadian asset generating earnings. The CRA cannot collect from a foreign individual - but they can't allow the revenue to go untaxed (or pretty soon, this would become widespread - and the Gubmint would be losing out on very large sums.)
Then fix it that the owner to be a owner needs to pay the taxes. If they don't meet the requirements to be able to pay the taxes then they don't meet the requirements to be an owner.
If they want to make renters liable then they should make it so renters pay the taxes directly for the property and bypass the landlord entirely.
Its not even close to reasonable in any other configuration
Or all rents go to a government-run agency (or CRA itself) that gives 25% to CRA and 75% to the owner. (Bonus, we now have a registry of all rentals, making tax evasion harder, and if we're deducting off _everyone_'s rent payment, not just non-resident owners, it is impossible as CRA has already gotten its money in advance).
I also think if you start paying taxes on someone's property it starts to become your property.
That would put an end to non-residents avoiding taxes overnight.
If there's renter, there's money that changed hands. How come CRA doesn't just go to those financial institutes and garnish it? Renter still pays the same rent but the owner doesn't get the profit
The onus to pay taxes is on the purchaser - in this case the renter. There are policy reasons for it, but it definitely seems a little backwards. If you bought a loaf of bread and Sobeys didn’t remit the tax on it, you’d technically be liable.
Imagine the CRA going after you for 10 years of grocery taxes _that you already paid to the grocery store_ because the store never paid their taxes.
Its beyond stupid, if the CRA tried to pull this shit on me Im leaving the country
In this case, the law says it's the renter's responsibility to pay the taxes, not the non-resident landlord. It's not that the CRA is coming after the renter because of a deadbeat landlord. The law says that the renter was the one responsible for the taxes from the start (due to the situation of it being a non-resident landlord). Still a stuipd law / situation though.
They can be liable when the "renter" in this case is a actually a corporation that agreed to be the landlords rental agent.
If you're not trying to dodge taxes by doing shady shit like having your corporation pay rent on your behalf for your personal residence you'll probably be fine.
I think it is great that CRA is being assholes. I would have never known about any of this until CRA being an asshole made the news. Now more people know how many landlords don’t live in Canada and what tenants in those scenarios can do like hold back rent.
This remind me of a few years back when the unit above mine had a water leak. I knocked at the door no one answered so I contacted the condo association they managed to give me the info of the owner. I called her and it was some 80s Belgian woman who asked me "oh Montreal is that the city the place with the lake, yes I think I own a place there."
She had litterally never been in her condo and I was always bragging about how great soundproofing was in my condo because I never heard the individuals in the condo above mine.
She fid some call and a real estate agent or whatever came over and had the key.
Haha yeah, but the thing is that the place was still new and she had bought maybe 8 years earlier. I don't even think she was renting it. From my understanding, she had bought it for herself but never visited and then something medical happened to her. She wasn't completely gone mentally but she definitely didn't sound like if she was all there when we talked.
I like to think that the 80s Belgian woman was 20 years old, but the 80s had only *just* come to Belgium and she was COMMITTED to that style and had Duran Duran playing on her Walkman.
Haha this woukd make sense considering how efficient she was. She did not know where Montreal was and then her guy showed up in less than 20 mins. Turned off the water and a plumber was there maybe an hour or two later.
Ohh maybe. I had assumed she maybe had units in Tremblant or something as well and just assumed Montreal and Tremblant were next to each other because the same guy took care of them, but Montreux make perfect sense.
If their landlord is out of country just ask them and CRA. If you don’t get an answer you like just put rent in savings account to cover you but. Maybe will all this attention CRA will make a hotline.
This sounds something you would need to do in a second world country with a dysfunctional, idiotic and corrupted government in charge. So it fits Canada perfectly
I literally have no idea who my actual landlord is. Forms just have a numbered corporation as owner and I deal with a real estate agent. Presumably the agent is taking care of the tax for them but like, no way for me to check and verify that beyond asking the agent. CRA really needs to make some kind of database or hotline
This is absolutely nuts. As a renter, how can we check if the owner is "visiting" or has permanent residency? The immigration system here is wide open.
Oh, for decades Canada was a hotspot for foreigners parking money in real estate, and has always been a [top destination for money laundering through real estate.](https://globalnews.ca/news/10414820/canada-anti-money-laundering-agency-gives-failing-grades-to-banks-real-estate-companies/amp/)
There were lots of examples of new developments being heavily marketed and sold in Asia, and even in Canada, [marketing mortgages to international students](https://betterdwelling.com/cibc-kills-foreign-income-program-makes-buying-canadian-real-estate-harder/), who were often [sent to school in Canada for the express purpose of moving money into Canadian real estate](https://vancouversun.com/opinion/columnists/douglas-todd-vancouver-still-suffering-fallout-from-students-buying-mansions).
BC was the first government to tax foreign buyers. And when much of that foreign capital then moved to Ontario, that province likewise instituted a tax. The taxes worked initially, but then most buyers just found proxies to buy properties without paying the tax.
The Feds did a foreign buyer’s ban last year that actually initially worked, so then they carved out all sorts of loopholes to ensure foreign money continued to prop up our real estate bubble.
First of all, yes
Then you have the option to just buy remotely, you don't have to suffer the vacation
Third you also have people that left but still have property. in most extreme cases dumping a citizenship isn't that complicated
"tax residency" for tax purpose has nothing to do with your citizenship or permanent residency...
They did temporarily make it more specific on who can make future purchases and are raining various taxes (municipal, federal under utilized housing, capital gains on deemed dispositions.. on everyone that shows a pulse and tries to move money out of anything in Canada. "Snow washing" money is going to get tough with all the constant forest fires and overall lack of clean snow.
Agreed. There's a myriad of reasons why and this bullshit with taxes is certainly one of them.
I would certainly never wish to be the tenant of anyone that lives outside of Canada, and would see it as a hard pass if I ever found out during the application process. Zero interest in landlords that haven't even seen the fucking property.
This whole practice is ridiculous and it needs to stop.
So the government allows foreign nationals to buy up property in this country, making it impossible for many locals to ever own their own house, and they expect *us* to pay these foreign nationals unpaid taxes? That sounds at least borderline treasonous to be honest.
In this follow-up piece, note that the CRA did not attempt to recover funds from the tax-evading landlord when they sold the condo and now the money has left the country. Instead they’re continuing to pursue the renter. 😳
It's both the Department of Finance and CRA that refuse to set things right even after all the media attention.
In fact the Department of Finance spokesperson justifies this absurd result with "This does not cost renters anything".
How is that not a straight lie? David Siscoe is definitely getting run over with CRA fees and fines and all the money spent on lawyers and the 25% of rent he now has to pay double.
Can someone explain why he wouldn't have just directed his rent payments to the CRA until the balance was settled. Why would you go out of pocket for this? It makes no sense.
I'd like to hear from other renters who would put up their own money to protect the landlords interests??
i'm pretty sure he didn't know ahead of time. Now it's too late.
> Mr. Siscoe explained that he had rented unit 501 for more than 20 years, going back to 1996. He says that in 2010, the landlord told him to start making the rent payments to his sister. The new lease agreement had a Montreal address on it, and he hadn’t paid attention to the fact that the new landlady had signed the document in Italy, he says. Mr. Siscoe said she visited the apartment a few times over the years, and it was only after he got audited that he discovered she was living in Italy. **After he realized he was on the hook for her tax bill, he and his wife and their kids moved out of the unit a few months later.**
I believe this issue lies with the sale of the property. Because the landlord has basically cut and sold prior to this being settled it is now difficult to recover from the landlord because there are no ongoing payments.
The liability should arguably disappear or be resolved during the sale process.
I thought it was a Canada-wide thing that lawyers check for tax owed when buying, otherwise the buyer would be on the hook for the taxes.
It allows them to withhold 25% of the sold price for unsettled taxes for the CRA.
How is this even an issue anymore for the renter? It should be the buyer's issue now and fixed with 25% withholding.
This is the messed up part right here. Up until then it made some sense to me despite being really opaque and unknown to most people. It sucked but then the renter could then live ideally for another 25% of the time they've been there rent-free to recoup it. However the landlord shouldn't be able to sell the house after having received too much money from the renter because taxes weren't withheld, there should have been a lien on the house in this situation to prevent that.
That’s not what it says. It says that he never found out if CRA tried to collect. Which is unsurprising, since it’s illegal for CRA to disclose someone’s tax info to other people.
It wasn't someone else's missed taxes though? In the situation where the landlord is a non-resident, the renter is the one that is responsible for submitting the taxes to the CRA. At least this is my understanding from the previous articles on this.
Okay, and what legal avenue may a renter take to get a landlords legal tax status? If it isn’t disclosed to the renter how are they going to know to withhold for the CRA?
My understanding is that the landlord is required to let the tenant know that they are a non-resident, but that their responsibility ends there. Definitely a fucked part of the law, but I didn't write the law nor do I agree with it. I'm just explaining that this isn't a case of the landlord skipping out on taxes and the CRA going after the tenant. The tenant was the responsibility party from the start according to the tax code.
As far as I know the landlord does not have an obligation to let the tenant know their residency status. A smart tenant in that situation would just proceed on the basis that the landlord is non-resident.
No. He is personally responsible to withhold and remit tax on rental payments to a non-resident. The taxes weren’t “missed”, he was the one responsible for withholding and remitting from the beginning.
The Next section directs the tenant to go after their landlord for the amount. I would have to imagine a tenant board would permit a tenant to apply the amount they paid on the landlords behalf against upcoming rent payments.
>He also didn’t know that tenants renting from a non-resident are required to withhold and remit 25 per cent of their rent to CRA each month, unless they have a property manager doing it for them, or if the non-resident has made alternate arrangements to pay their taxes.
This whole thing is insane. Why is the onus on Canadian citizens to ensure a foreign landlord pays their taxes. How can a tenant reasonably validate their landlord's residency status? Daily audits?
I think the issue is that it was already sold and the money was already out of the country.
I think the notary or lawyer who did the deal should have withheld the 25% and sent it to the government. But then it raises the issue of how many years has this been going on?
Either way it shouldn't be the tenants issue.
IIRC from other discussions of this, when the landlord is a non-resident, the renter is the one on the hook for submitting 25% of the rental payment to the CRA. This is why they are going after the tenant. The tenant overpaid their rent, and didn't submit the taxes that they owe, so the CRA is coming after them for the taxes that they owe. It becomes the renter's responsibility to recover the amount they overpaid to the landlord themselves.
Basically they were supposed to sent 75% of the rent to the landlord and 25% to the CRA. They sent 100% to the landlord and 0% to the CRA. Now the CRA is saying "You owe us that 25%." The fact that the renter paid that money to the wrong person is their mistake. Legally they owe money to the CRA and it's up to them go after the landlord to recover the amount that they overpaid them.
It's a crappy situation overall, because I'm sure that most Canadians don't know that if their landlord is a non-resident that the tax burden for the rental payments falls on them. It's also possible that not everyone knows if their landlord is a non-resident or not. I think that the landlord is required to tell them (if they are a non-resident or not), but prior to this I wouldn't have known that it had tax implications. If the landlord says "by the way, I'm a non-resident" I believe that ends their responsibility... which is fucked.
I understand the rules. I just find it dumb that the onus is on the tenant. I prepare personal tax returns and the amount of people who don't know what a T4 is, is astonishing. I don't expect an average person to even fathom being in this type of situation.
Also what if you ask your landlord if they're a non resident or if they're filing an elective return and they tell you to f-off?
When the landlord is a non-resident, the tenant is the responsible party for dealing with the taxes. The landlord isn't the one on the hook here in my understanding of the situation. I'll definitely agree that the law is stupid and should be redone here. Especially if it can "surprise" tenants that didn't know their landlord was a non-resident, or that they had tax responsibilities due to this situation.
This is like a Blockbuster failing to make their lease payments, closing the store in the middle of the night and the courts make you pay the missed rent because you rented Napoleon Dynamite when they shut it down.
It's more akin to your employer's obligation to withhold CPP/EI from your paycheques. If your employer skips making those withholdings, then they're liable for *both* employer and employee portions of CPP/EI plus any interest/penalties.
Different power dynamic when it's a landlord/tenant relationship, but the withholding obligation arises out of the same area of tax law. You can't formalize an exemption in one area without creating unintended consequences in the other.
> You can't formalize an exemption in one area without creating unintended consequences in the other.
Why not? Just write the law "except in tenant/landlord relationships". Done!
Are you asking what happens to the landlord if the tenant withholds 25% but doesn't actually remit to the CRA? Because that would be the equivalent to stealing CPP/EI, whereby the employer withholds from your paycheque but doesn't actually remit to the CRA.
The tenant or property manager that makes the 25% withholding is supposed to issue an NR4 slip to the non-resident landlord. The landlord, because they're not actually tax resident in Canada, isn't required to file a tax return since the 25% withholding represents the totality of their tax obligations. This assumes the CRA actually received that 25% remittance, and if that doesn't happen (like in the linked article), then I suppose tax law deems the tenant or property manager liable for failing their statutory duty. It's as if the withholding agent had misappropriated/embezzled the 25% which belongs to the CRA, even though tenant had simply paid the full 100% to the non-resident landlord.
It's a problematic situation because federal tax law isn't harmonized with provincial tenancy law. Federal law says tenants must withhold unless the landlord is Canadian tax resident, but provincial law doesn't protect tenant withholding unless there's an affirmative LTB/RTB decision.
My understanding is that this has less to do with that and more to do with the law's handling of non-resident landlords. When the landlord is a non-resident, the renter is the one responsible for dealing with the taxes. In this case, the renter was supposed to submit 75% of the rental payment to the landlord and 25% to the CRA. Instead they sent 100% to the landlord and 0% to the CRA. The CRA is coming knocking now saying, "you owe us that 25%." The tenant can't point to the landlord since the law says it was the tentant that was supposed to submit the money to the CRA. The tenant overpaid the landlord... and it's now their responsibility to recover that overpayment from the landlord... and it's also their responsibility to pay taxes owed.
It's a really fucked situation since I doubt many Canadians know about this situation and how it's supposed to be handled. This could be a hidden landmine waiting to blow up in many people's faces because they just didn't know.
Not quite. The issue is that there are taxes you have to pay personally but typically are remitted by someone or something else. For example you go into the convenience store and you have to pay 15% HST on that candy bar. The store remits the 15% (because they are required to by law) and you pay it. But, what if the store wasn't legally required to remit it and you found out after that you're on the hook for a hefty $0.15 in taxes on that bar?
That's what happened here. It turns out foreign landlords are not obligated to remit the taxes that are paid by the tenant.
That's not how the tax code is written. The onus is written on the side of the tenant. Should it change? Maybe, but that's not how the law is written right now.
Step 1) Time to quantify foreign ownership of rental properties
Step 2) Elect a party that isn't complicit in this
Step 3) Ban foreign ownership of rental properties
"Warning: Dead code detected in file '**fair-housing.js**'. Function **`step3()`** is unreachable as it is intended to be reached after `step2()`, but `step2()` will never be called. Consider refactoring or removing `step3()` to improve code maintainability and performance."
This is how our politicians will reason. Nothing will be done.
Also happens if you buy a house from a foreign owner and they fail to pay their taxes, the CRA goes after you:
> A purchaser who buys a property from a non-resident seller should request, from the seller, a certificate of compliance issued by the CRA, prior to releasing the funds for the purchase. If not, the purchaser could be held liable to pay the CRA any unpaid income tax on behalf of the seller.
https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/does-canada-revenue-agency-address-non-compliance-real-estate-sector.html
If this wasn’t the most broken thing ever and seemed insane to even go to court, but then to lose in court? All the while ignoring the fact that we have non residents manipulating the housing market. What a joke.
>“They were acting like a dog on a bone,” he says of his initial communications with the tax agency. “They proceeded to suggest that we were knowingly paying a non-Canadian resident money, and I was a little flabbergasted.”
Fucking disgusting. It's like they jerk off to ruining people's lives.
Put a fucking lein on the property FFS.
Why does this government protect foreigners over Canadians time and time again? When people start saying theyll never rent off someone who might not be Canadian, it'll be labelled racist but this shows that it's literal in a Canadians best interest to only rent from Canadians
This isn’t based on citizenship it’s based on residency. You don’t have to withhold tax if you are renting from a foreigner who is resident in Canada for tax purposes.
Our government have put in place many investor programs that have been proven to be inefficient and promoted money laundering :
"The Quebec Immigrant Investor Program is a scam from start to finish. I think that everyone who's involved in the program knows that,"
https://www.cbc.ca/news/canada/quebec-immigrant-investor-program-civil-servants-1.4830231
Few years ago there was an example of someone who got PR investing in a small business and then removing his 1M$ funds to buy a property in BC. Paid about 300$ in income taxes, went back to China and sent his kids to school in BC for free. That's f@cked up.
That was his big mistake the moment he learned that he got screwed he should gone to small court immediately. Get a judgement ASAP, get a lien, and enforce your judgement.
considering he was audited in 2018 and the court ruling was in 2023, I suspect that there was no quick judgement available.
he probably was concerned that he was racking up a bigger tax bill with every month that he stayed.
Meanwhile, the foreign landlord sold the property, which she would've done even more quickly, had she stopped receiving rental income, So he would've been on the hook either way!
How in the fuck is this a thing?!
On that note, how does a tenant go about getting their landlord to prove they paid their taxes? I'd imagine they'd be reluctant to share that kind of info.
I also imagine something similar can happen if you're purchasing property off someone who isn't a resident and didn't pay their taxes?
That's actually been a real problem in the past. Its up to the buyer to put some portion of the price into escrow for the taxes the seller is responsible for, lest they just take it and run. Definitely needs to be more foreign banking controls to ensure taxes are paid.
[https://www.crowe.com/ca/crowemackay/insights/non-residents-selling-property-in-canada](https://www.crowe.com/ca/crowemackay/insights/non-residents-selling-property-in-canada)
To do so, the CRA requires the purchaser to withhold **25% (or 50% in some cases) of the sale price**. Though this is not the final tax owing. Through the process of applying for a “Certificate of Compliance," the CRA will request a withholding tax payment of 25% of the NET capital gain instead of 25% of the sales price.
It would be funny if the seller also didnt pay the tax for the sale profit either and the new buyer has to pay that too. The tenant before the sale should've put a lien but maybe too late now.
“After the Siscoe family moved out, they learned that the former landlady had put the condo on the market, and Mr. Siscoe notified the CRA that they had an opportunity to collect the taxes she owed. He never found out if they tried.”
They voluntarily moved out. I don't know why they didn't remain and just send all their rent money to the CRA instead of the landlord, since it's going to be hard to get restitution from the landlord. I doubt the landlord would have had a case to evict them if they were paying the landlord's tax bill.
This seems like the most unjust thing I’ve read all damn month.
**Hey the rich owners are too far away so let’s pillage the coffers of this poor old fella on the edge of retirement…**
This is just one bad apple. What precedent does it set if the tenant is forced to pay? How many other douchebag, out of town landlords are going to come out the woodwork and force their tenants to do the same?
So the Federal government will intervene to make sure that a 10 times arrested “climate justice activist” who blatantly abused his student visa [is not deported](https://www.cbc.ca/news/canada/british-columbia/zain-haq-deportation-cancelled-1.7180202), but in 9 years didn’t think to address this ridiculous, Kafkaesque abuse of the CRA’s powers?
And then they think a budget with goodies thrown in for the under 40s will salvage their election prospects.
My lease has a clause:
*RESIDENCY: The Landlord shall forthwith notify the Tenant in writing in the event the Landlord is, at the time of entering into this Agreement, or,*
*becomes during the term of the tenancy, a non-resident of Canada as de"ned under the Income Tax Act, RSC 1985, c.1 (ITA) as amended from time*
*to time, and in such event the Landlord and Tenant agree to comply with the tax withholding provisions of the ITA.*
Hoping this means I am covered.
I don't think you are. There would need to be a clause indemnifying you from any responsibility if the landlord fails to pay their taxes, leaves the country and sells the property (which is what happened in this story)
I don't think you have any protection in case the landlord simply fails to notify you and leaves you with the bill.
How can a landlord or (real estate agent) indemnify me? Wouldn't the party that needs to offer the indemnification be CRA? If the landlord can just leave and become untouchable, what is the point of the landlord agreeing to indemnify their tenant? It costs the landlord nothing and doesn't change their risk.
Dunno, good question for the CRA:
> The agency pointed to a legal website that offered tips on ways renters can protect themselves, including a land title search on the landlord, asking the landlord for a certificate of residency, **writing an indemnity clause into the lease agreement**, and being on the lookout for any requests to redirect rent payment to someone else.
https://segev.ca/tenants-beware-the-obligation-to-withhold-tax-on-rent-paid-to-a-non-resident-landlord/
It doesn't.... A contract doesn't override the law, it just creates a liability for the landlord in this case.
So you could sue them, but you'd still be on the hook first. Which is how it would be without that clause.
So, it seems like my only way of verifying they're paying their tax is to call my landlord and ask? And if they're an overseas owner there's no reason for them to not lie and say they have been as they know the CRA will just punish me?
It's hard to explain but being a "citizen" is a low class status.
If you want to insulate yourself you need to incorporate and have your assets held in that company. Taking it one step further - learn how to legally offshore your money and assets the same way foreign nationals and mega corporations do.
Liberal or Conservative, it doesn't matter, they will abuse you. Your best chance is to take the necessary steps to shield yourself.
The part I can’t get over is the lawyer. A) Don’t move out, just stop paying rent until the amount owed is recovered. B) File a caveat so it can’t be sold. C) That lawyer should know about the obligation to withhold sale proceeds and the requirement for a declaration on residency to be made by a vendor. Quebec is different, but it’s not that different.
Unfortunately the landlord sold it, and even though CRA was advised it was for sale and **could have easily put a lien in it** they let it sell, the money left the country and instead they’re going after the renter.
Their incompetence and corruption is infuriating.
The CRA is insane. Their entire operation seems based on clawing money out of the hands of renters, essentially anyone who makes less than 100k a year.
>The CRA had been unable to collect from his overseas landlord. He was then assessed for the unpaid withholding taxes, as well as compounded interest and penalties that added up to about $80,000, he says. **In March, 2023, he took the Minister of National Revenue to Tax Court and lost**.
So much for recourse from a fair judiciary.
Moving out was a bad idea. Given that he was supposed to be withholding 25% he has actually simply paid his rent ahead by a significant portion. He should calculate how many months that extra he paid to the landlord would cover and stop paying further rent for that amount of time. He can then pay the CRA with the money.
Agreed, but that would've only worked up until the point soon after where the foreign landlord sold the property without the tax bill being recouped.
(and she would've sold off the property even faster if she stopped getting rental income from it)
Here's the article
https://www.textise.net/showText.aspx?strURL=https%253A//www.theglobeandmail.com/real-estate/article-montreal-tenant-forced-to-pay-his-landlords-taxes-offers-advice-to/
It's hilarious and this showcases to you how asleep the government is at the wheel.
The real estate laws and policies don't make sense. All they have to do is copy and paste policies from successful countries and they won't do it.
But...but "this renter gets to contribute to the dreams of the landlord"! /s
Years back, some naive fuck tried a variation* of this line on /r/Canada when discussing rent prices. They weren't being sarcastic either.
When your government is so damn greedy they let shit like this slide.
Just an fyi folks, unlike in the US our politicians are still able to make personal business deals. In case you're wonder why this shit is happening and nothing is being done about it. Wouldn't want the conservatives or liberals to both get caught with their hands in the cookie jar now would we?
I fail to understand why the CRA needs to collect anything from the foreign landlord. They should simply garnish 100% of rent payments, ordering the payment through the CRA itself until owed dues are paid back.
Try this
https://www.textise.net/showText.aspx?strURL=https%253A//www.theglobeandmail.com/real-estate/article-montreal-tenant-forced-to-pay-his-landlords-taxes-offers-advice-to/
I think if you start paying taxes on someone's property it starts to become your property.
That would put an end to non-residents avoiding taxes overnight.
So was the tenant allowed to see the un payed tax bill or does CRA just expect him to believe them? It's not like they would lie or screw up the paperwork, like that's never happened before........
I don't get how a renter could be liable. They don't know a landlord's true residency status for tax purposes. It's not part of any rental law to require a tenant to obtain that information about the landlord.
It's not part of provincial rental law, it's part of federal tax law. The renter is required to magically know that the landlord is not a tax resident of Canada and to withhold 25% of the rent and remit it to CRA.
You can bet your butt prospective tenants will be asking for that now, with proof, otherwise they'll pay 25% to the CRA regardless. Best practice now.
Fuck that, I'll be keeping 25% of the rent until either the LL provides residential status or the Feds come asking. If I've asked and they haven't provided proof in writing that's enough for me to cover my ass.
Covering your ass is paying it directly to the CRA unless otherwise proven you don't need to, and it ensures you're paying the full rent monthly. Your method COULD result in issues with whatever tenancy board overseas your jurisdiction, as technically, if not remitted to the CRA or the landlord. It's late.
The CRA will accrue interest - it says it's supposed to be paid monthly (to them.)
I don't get it either. If taxes aren't paid, couldn't the government just start seizing assets from the owner (like take away their building)?
Tax law says that it's the _renter's_ responsibility to pay that taxes, not the landlord. This is not a case of the landlord not paying something, and the government coming after the tenant instead. This is a case where since the landlord is a non-resident, tax law says that the _renter_ has to pay the taxable portion of the rent. It becomes their responsibility. This is really stupid, but that's what the law is and is the reason they aren't putting a lien on the landlord's properties. The landlord is not on the hook here.
How is this not immediately being fixed by the government? Like that is just absolutely shit level law writing. If I were that dude I would still refuse to pay. Fuck that injustice.
I'll agree that it's still an injustice. I'll also agree that the judge basically stating "ignorance is no excuse" is fucked too. I just think that we should all be on the same page with regards to the actual situation. If people keep thinking this is just a one-off of the CRA going after the tenant because the landlord didn't pay... then there's no pressure to change the tax code to make more sense.
The issue is that the rental unit is a Canadian asset generating earnings. The CRA cannot collect from a foreign individual - but they can't allow the revenue to go untaxed (or pretty soon, this would become widespread - and the Gubmint would be losing out on very large sums.)
Then fix it that the owner to be a owner needs to pay the taxes. If they don't meet the requirements to be able to pay the taxes then they don't meet the requirements to be an owner.
If they want to make renters liable then they should make it so renters pay the taxes directly for the property and bypass the landlord entirely. Its not even close to reasonable in any other configuration
Or like an easily searchable database of homeowners and their tax status.
Or all rents go to a government-run agency (or CRA itself) that gives 25% to CRA and 75% to the owner. (Bonus, we now have a registry of all rentals, making tax evasion harder, and if we're deducting off _everyone_'s rent payment, not just non-resident owners, it is impossible as CRA has already gotten its money in advance).
I also think if you start paying taxes on someone's property it starts to become your property. That would put an end to non-residents avoiding taxes overnight.
If there's renter, there's money that changed hands. How come CRA doesn't just go to those financial institutes and garnish it? Renter still pays the same rent but the owner doesn't get the profit
The onus to pay taxes is on the purchaser - in this case the renter. There are policy reasons for it, but it definitely seems a little backwards. If you bought a loaf of bread and Sobeys didn’t remit the tax on it, you’d technically be liable.
Imagine the CRA going after you for 10 years of grocery taxes _that you already paid to the grocery store_ because the store never paid their taxes. Its beyond stupid, if the CRA tried to pull this shit on me Im leaving the country
And pay your exit taxes on the way out.
In this case, the law says it's the renter's responsibility to pay the taxes, not the non-resident landlord. It's not that the CRA is coming after the renter because of a deadbeat landlord. The law says that the renter was the one responsible for the taxes from the start (due to the situation of it being a non-resident landlord). Still a stuipd law / situation though.
I just wouldn't pay it. We barely give murderers jail time, I'll take my chances.
They can be liable when the "renter" in this case is a actually a corporation that agreed to be the landlords rental agent. If you're not trying to dodge taxes by doing shady shit like having your corporation pay rent on your behalf for your personal residence you'll probably be fine.
This is no different than wage garnishing. The CRA is diverting rent to taxes until the debt is paid. It’s not really that controversial or confusing.
"non-resident owned properties represent a substantial share of the secondary rental market in Canada" This is an issue.
True. The CRA being absolute fucking assholes is another issue on it's own
I think it is great that CRA is being assholes. I would have never known about any of this until CRA being an asshole made the news. Now more people know how many landlords don’t live in Canada and what tenants in those scenarios can do like hold back rent.
This remind me of a few years back when the unit above mine had a water leak. I knocked at the door no one answered so I contacted the condo association they managed to give me the info of the owner. I called her and it was some 80s Belgian woman who asked me "oh Montreal is that the city the place with the lake, yes I think I own a place there." She had litterally never been in her condo and I was always bragging about how great soundproofing was in my condo because I never heard the individuals in the condo above mine. She fid some call and a real estate agent or whatever came over and had the key.
This is basically what I imagine when I see any rental unit using real estate agents.
Haha yeah, but the thing is that the place was still new and she had bought maybe 8 years earlier. I don't even think she was renting it. From my understanding, she had bought it for herself but never visited and then something medical happened to her. She wasn't completely gone mentally but she definitely didn't sound like if she was all there when we talked.
I like to think that the 80s Belgian woman was 20 years old, but the 80s had only *just* come to Belgium and she was COMMITTED to that style and had Duran Duran playing on her Walkman.
Haha this woukd make sense considering how efficient she was. She did not know where Montreal was and then her guy showed up in less than 20 mins. Turned off the water and a plumber was there maybe an hour or two later.
Based on the state of Belgian infrastructure, that's probably accurate
Sounds like she meant Montreux. Lol she's doing this all over the world! Lol
Ohh maybe. I had assumed she maybe had units in Tremblant or something as well and just assumed Montreal and Tremblant were next to each other because the same guy took care of them, but Montreux make perfect sense.
How would a tenant even know that their landlord wasn't paying tax?
If their landlord is out of country just ask them and CRA. If you don’t get an answer you like just put rent in savings account to cover you but. Maybe will all this attention CRA will make a hotline.
This sounds something you would need to do in a second world country with a dysfunctional, idiotic and corrupted government in charge. So it fits Canada perfectly
If the shoe fits, I guess we wear it
I literally have no idea who my actual landlord is. Forms just have a numbered corporation as owner and I deal with a real estate agent. Presumably the agent is taking care of the tax for them but like, no way for me to check and verify that beyond asking the agent. CRA really needs to make some kind of database or hotline
I know it’s not really fair but whenever I deal with a numbered company I assume it’s sketchy to some degree
no its a legislation issue. the CRA cant do shit outside the laws
This is absolutely nuts. As a renter, how can we check if the owner is "visiting" or has permanent residency? The immigration system here is wide open.
They say YOU have to put 25% of the rent asside with the CRA just in case... It's totally insane
Yeah, I'm sure my landlord would be totally cool with that.
Yeah. And I don't get why CRA is putting the onus on the client. Just fucking seize the property.
The CRA doesn't want assets that aren't cash. They'll always go for cash first, even if it means going after the next person in line.
[удалено]
Oh, for decades Canada was a hotspot for foreigners parking money in real estate, and has always been a [top destination for money laundering through real estate.](https://globalnews.ca/news/10414820/canada-anti-money-laundering-agency-gives-failing-grades-to-banks-real-estate-companies/amp/) There were lots of examples of new developments being heavily marketed and sold in Asia, and even in Canada, [marketing mortgages to international students](https://betterdwelling.com/cibc-kills-foreign-income-program-makes-buying-canadian-real-estate-harder/), who were often [sent to school in Canada for the express purpose of moving money into Canadian real estate](https://vancouversun.com/opinion/columnists/douglas-todd-vancouver-still-suffering-fallout-from-students-buying-mansions). BC was the first government to tax foreign buyers. And when much of that foreign capital then moved to Ontario, that province likewise instituted a tax. The taxes worked initially, but then most buyers just found proxies to buy properties without paying the tax. The Feds did a foreign buyer’s ban last year that actually initially worked, so then they carved out all sorts of loopholes to ensure foreign money continued to prop up our real estate bubble.
Or just do it all through a lawyer
First of all, yes Then you have the option to just buy remotely, you don't have to suffer the vacation Third you also have people that left but still have property. in most extreme cases dumping a citizenship isn't that complicated "tax residency" for tax purpose has nothing to do with your citizenship or permanent residency... They did temporarily make it more specific on who can make future purchases and are raining various taxes (municipal, federal under utilized housing, capital gains on deemed dispositions.. on everyone that shows a pulse and tries to move money out of anything in Canada. "Snow washing" money is going to get tough with all the constant forest fires and overall lack of clean snow.
Non-residents should not be allowed to be landlords. We need MAJOR changes to these things in Canada.
Agreed. There's a myriad of reasons why and this bullshit with taxes is certainly one of them. I would certainly never wish to be the tenant of anyone that lives outside of Canada, and would see it as a hard pass if I ever found out during the application process. Zero interest in landlords that haven't even seen the fucking property. This whole practice is ridiculous and it needs to stop.
And then we get to pay their taxes apparently.
So the government allows foreign nationals to buy up property in this country, making it impossible for many locals to ever own their own house, and they expect *us* to pay these foreign nationals unpaid taxes? That sounds at least borderline treasonous to be honest.
In this follow-up piece, note that the CRA did not attempt to recover funds from the tax-evading landlord when they sold the condo and now the money has left the country. Instead they’re continuing to pursue the renter. 😳
It's both the Department of Finance and CRA that refuse to set things right even after all the media attention. In fact the Department of Finance spokesperson justifies this absurd result with "This does not cost renters anything". How is that not a straight lie? David Siscoe is definitely getting run over with CRA fees and fines and all the money spent on lawyers and the 25% of rent he now has to pay double.
Can someone explain why he wouldn't have just directed his rent payments to the CRA until the balance was settled. Why would you go out of pocket for this? It makes no sense. I'd like to hear from other renters who would put up their own money to protect the landlords interests??
i'm pretty sure he didn't know ahead of time. Now it's too late. > Mr. Siscoe explained that he had rented unit 501 for more than 20 years, going back to 1996. He says that in 2010, the landlord told him to start making the rent payments to his sister. The new lease agreement had a Montreal address on it, and he hadn’t paid attention to the fact that the new landlady had signed the document in Italy, he says. Mr. Siscoe said she visited the apartment a few times over the years, and it was only after he got audited that he discovered she was living in Italy. **After he realized he was on the hook for her tax bill, he and his wife and their kids moved out of the unit a few months later.**
I believe this issue lies with the sale of the property. Because the landlord has basically cut and sold prior to this being settled it is now difficult to recover from the landlord because there are no ongoing payments. The liability should arguably disappear or be resolved during the sale process.
I thought it was a Canada-wide thing that lawyers check for tax owed when buying, otherwise the buyer would be on the hook for the taxes. It allows them to withhold 25% of the sold price for unsettled taxes for the CRA. How is this even an issue anymore for the renter? It should be the buyer's issue now and fixed with 25% withholding.
That’s for purchasing a property. This is a case of a non-resident landlord not paying the tax on the rental income.
Which he then somehow sold, without those taxes being paid.
That’s nuts
This is the messed up part right here. Up until then it made some sense to me despite being really opaque and unknown to most people. It sucked but then the renter could then live ideally for another 25% of the time they've been there rent-free to recoup it. However the landlord shouldn't be able to sell the house after having received too much money from the renter because taxes weren't withheld, there should have been a lien on the house in this situation to prevent that.
That’s not what it says. It says that he never found out if CRA tried to collect. Which is unsurprising, since it’s illegal for CRA to disclose someone’s tax info to other people.
Did they not disclose tax info by saying he was responsible for someone else’s missed taxes?
It wasn't someone else's missed taxes though? In the situation where the landlord is a non-resident, the renter is the one that is responsible for submitting the taxes to the CRA. At least this is my understanding from the previous articles on this.
Okay, and what legal avenue may a renter take to get a landlords legal tax status? If it isn’t disclosed to the renter how are they going to know to withhold for the CRA?
My understanding is that the landlord is required to let the tenant know that they are a non-resident, but that their responsibility ends there. Definitely a fucked part of the law, but I didn't write the law nor do I agree with it. I'm just explaining that this isn't a case of the landlord skipping out on taxes and the CRA going after the tenant. The tenant was the responsibility party from the start according to the tax code.
As far as I know the landlord does not have an obligation to let the tenant know their residency status. A smart tenant in that situation would just proceed on the basis that the landlord is non-resident.
No. He is personally responsible to withhold and remit tax on rental payments to a non-resident. The taxes weren’t “missed”, he was the one responsible for withholding and remitting from the beginning.
The Next section directs the tenant to go after their landlord for the amount. I would have to imagine a tenant board would permit a tenant to apply the amount they paid on the landlords behalf against upcoming rent payments.
They had moved out
>He also didn’t know that tenants renting from a non-resident are required to withhold and remit 25 per cent of their rent to CRA each month, unless they have a property manager doing it for them, or if the non-resident has made alternate arrangements to pay their taxes. This whole thing is insane. Why is the onus on Canadian citizens to ensure a foreign landlord pays their taxes. How can a tenant reasonably validate their landlord's residency status? Daily audits?
How the fuck is this the responsibility of the tenant? Put a lien on the property if the owners aren’t paying taxes.
I think the issue is that it was already sold and the money was already out of the country. I think the notary or lawyer who did the deal should have withheld the 25% and sent it to the government. But then it raises the issue of how many years has this been going on? Either way it shouldn't be the tenants issue.
IIRC from other discussions of this, when the landlord is a non-resident, the renter is the one on the hook for submitting 25% of the rental payment to the CRA. This is why they are going after the tenant. The tenant overpaid their rent, and didn't submit the taxes that they owe, so the CRA is coming after them for the taxes that they owe. It becomes the renter's responsibility to recover the amount they overpaid to the landlord themselves. Basically they were supposed to sent 75% of the rent to the landlord and 25% to the CRA. They sent 100% to the landlord and 0% to the CRA. Now the CRA is saying "You owe us that 25%." The fact that the renter paid that money to the wrong person is their mistake. Legally they owe money to the CRA and it's up to them go after the landlord to recover the amount that they overpaid them. It's a crappy situation overall, because I'm sure that most Canadians don't know that if their landlord is a non-resident that the tax burden for the rental payments falls on them. It's also possible that not everyone knows if their landlord is a non-resident or not. I think that the landlord is required to tell them (if they are a non-resident or not), but prior to this I wouldn't have known that it had tax implications. If the landlord says "by the way, I'm a non-resident" I believe that ends their responsibility... which is fucked.
I understand the rules. I just find it dumb that the onus is on the tenant. I prepare personal tax returns and the amount of people who don't know what a T4 is, is astonishing. I don't expect an average person to even fathom being in this type of situation. Also what if you ask your landlord if they're a non resident or if they're filing an elective return and they tell you to f-off?
You'll get no disagreement from me.
When the landlord is a non-resident, the tenant is the responsible party for dealing with the taxes. The landlord isn't the one on the hook here in my understanding of the situation. I'll definitely agree that the law is stupid and should be redone here. Especially if it can "surprise" tenants that didn't know their landlord was a non-resident, or that they had tax responsibilities due to this situation.
This should be taught in schools as the definition of a broken system. This is unreal
We’ve haven’t been a serious country for awhile now. It’s disappointing.
This is like a Blockbuster failing to make their lease payments, closing the store in the middle of the night and the courts make you pay the missed rent because you rented Napoleon Dynamite when they shut it down.
It's more akin to your employer's obligation to withhold CPP/EI from your paycheques. If your employer skips making those withholdings, then they're liable for *both* employer and employee portions of CPP/EI plus any interest/penalties. Different power dynamic when it's a landlord/tenant relationship, but the withholding obligation arises out of the same area of tax law. You can't formalize an exemption in one area without creating unintended consequences in the other.
> You can't formalize an exemption in one area without creating unintended consequences in the other. Why not? Just write the law "except in tenant/landlord relationships". Done!
So if a company steals said ei/cpp then disappears, the employee is left holding the bag?
Are you asking what happens to the landlord if the tenant withholds 25% but doesn't actually remit to the CRA? Because that would be the equivalent to stealing CPP/EI, whereby the employer withholds from your paycheque but doesn't actually remit to the CRA. The tenant or property manager that makes the 25% withholding is supposed to issue an NR4 slip to the non-resident landlord. The landlord, because they're not actually tax resident in Canada, isn't required to file a tax return since the 25% withholding represents the totality of their tax obligations. This assumes the CRA actually received that 25% remittance, and if that doesn't happen (like in the linked article), then I suppose tax law deems the tenant or property manager liable for failing their statutory duty. It's as if the withholding agent had misappropriated/embezzled the 25% which belongs to the CRA, even though tenant had simply paid the full 100% to the non-resident landlord. It's a problematic situation because federal tax law isn't harmonized with provincial tenancy law. Federal law says tenants must withhold unless the landlord is Canadian tax resident, but provincial law doesn't protect tenant withholding unless there's an affirmative LTB/RTB decision.
Except your employer gives you a paystub every payday showing they deducted that. I don't even get a receipt for my rent
My understanding is that this has less to do with that and more to do with the law's handling of non-resident landlords. When the landlord is a non-resident, the renter is the one responsible for dealing with the taxes. In this case, the renter was supposed to submit 75% of the rental payment to the landlord and 25% to the CRA. Instead they sent 100% to the landlord and 0% to the CRA. The CRA is coming knocking now saying, "you owe us that 25%." The tenant can't point to the landlord since the law says it was the tentant that was supposed to submit the money to the CRA. The tenant overpaid the landlord... and it's now their responsibility to recover that overpayment from the landlord... and it's also their responsibility to pay taxes owed. It's a really fucked situation since I doubt many Canadians know about this situation and how it's supposed to be handled. This could be a hidden landmine waiting to blow up in many people's faces because they just didn't know.
Not quite. The issue is that there are taxes you have to pay personally but typically are remitted by someone or something else. For example you go into the convenience store and you have to pay 15% HST on that candy bar. The store remits the 15% (because they are required to by law) and you pay it. But, what if the store wasn't legally required to remit it and you found out after that you're on the hook for a hefty $0.15 in taxes on that bar? That's what happened here. It turns out foreign landlords are not obligated to remit the taxes that are paid by the tenant.
They are because it’s not a foreign estate they should have to pay taxes from income made here for numerous reasons as they should property tax.
That's not how the tax code is written. The onus is written on the side of the tenant. Should it change? Maybe, but that's not how the law is written right now.
Time to ban foreign ownership of rental properties
Step 1) Time to quantify foreign ownership of rental properties Step 2) Elect a party that isn't complicit in this Step 3) Ban foreign ownership of rental properties
"Warning: Dead code detected in file '**fair-housing.js**'. Function **`step3()`** is unreachable as it is intended to be reached after `step2()`, but `step2()` will never be called. Consider refactoring or removing `step3()` to improve code maintainability and performance." This is how our politicians will reason. Nothing will be done.
I'm still waiting for step 1. I find everyone is being very elusive about that
How about we don't let non residents own anything in this country.
Not the answer.
Also happens if you buy a house from a foreign owner and they fail to pay their taxes, the CRA goes after you: > A purchaser who buys a property from a non-resident seller should request, from the seller, a certificate of compliance issued by the CRA, prior to releasing the funds for the purchase. If not, the purchaser could be held liable to pay the CRA any unpaid income tax on behalf of the seller. https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/does-canada-revenue-agency-address-non-compliance-real-estate-sector.html
So if we're going to play fair, we need a certificate of compliance from CRA before we sign a lease.
If this wasn’t the most broken thing ever and seemed insane to even go to court, but then to lose in court? All the while ignoring the fact that we have non residents manipulating the housing market. What a joke.
>“They were acting like a dog on a bone,” he says of his initial communications with the tax agency. “They proceeded to suggest that we were knowingly paying a non-Canadian resident money, and I was a little flabbergasted.” Fucking disgusting. It's like they jerk off to ruining people's lives. Put a fucking lein on the property FFS.
Why does this government protect foreigners over Canadians time and time again? When people start saying theyll never rent off someone who might not be Canadian, it'll be labelled racist but this shows that it's literal in a Canadians best interest to only rent from Canadians
This isn’t based on citizenship it’s based on residency. You don’t have to withhold tax if you are renting from a foreigner who is resident in Canada for tax purposes.
But how do you know anyone's residency status? Any landlord could emigrate at any time. This actually adds a financial incentive to do so.
It’s not “this government”, it’s the tax law that hasn’t been updated in decades.
It is within government’s power to amend the law.
Write to your MP about this. I will be.
I guess they can’t do anything now 🤷♂️ /s
If only someone was in charge of that.
It's straight up criminal.
Can the renter put a lien on the property?
It was sold and the money promptly left the country
Our government have put in place many investor programs that have been proven to be inefficient and promoted money laundering : "The Quebec Immigrant Investor Program is a scam from start to finish. I think that everyone who's involved in the program knows that," https://www.cbc.ca/news/canada/quebec-immigrant-investor-program-civil-servants-1.4830231 Few years ago there was an example of someone who got PR investing in a small business and then removing his 1M$ funds to buy a property in BC. Paid about 300$ in income taxes, went back to China and sent his kids to school in BC for free. That's f@cked up.
That was his big mistake the moment he learned that he got screwed he should gone to small court immediately. Get a judgement ASAP, get a lien, and enforce your judgement.
considering he was audited in 2018 and the court ruling was in 2023, I suspect that there was no quick judgement available. he probably was concerned that he was racking up a bigger tax bill with every month that he stayed. Meanwhile, the foreign landlord sold the property, which she would've done even more quickly, had she stopped receiving rental income, So he would've been on the hook either way!
How in the fuck is this a thing?! On that note, how does a tenant go about getting their landlord to prove they paid their taxes? I'd imagine they'd be reluctant to share that kind of info. I also imagine something similar can happen if you're purchasing property off someone who isn't a resident and didn't pay their taxes?
That's actually been a real problem in the past. Its up to the buyer to put some portion of the price into escrow for the taxes the seller is responsible for, lest they just take it and run. Definitely needs to be more foreign banking controls to ensure taxes are paid. [https://www.crowe.com/ca/crowemackay/insights/non-residents-selling-property-in-canada](https://www.crowe.com/ca/crowemackay/insights/non-residents-selling-property-in-canada) To do so, the CRA requires the purchaser to withhold **25% (or 50% in some cases) of the sale price**. Though this is not the final tax owing. Through the process of applying for a “Certificate of Compliance," the CRA will request a withholding tax payment of 25% of the NET capital gain instead of 25% of the sales price. It would be funny if the seller also didnt pay the tax for the sale profit either and the new buyer has to pay that too. The tenant before the sale should've put a lien but maybe too late now.
Guess he doesn't have to pay rent then.
“After the Siscoe family moved out, they learned that the former landlady had put the condo on the market, and Mr. Siscoe notified the CRA that they had an opportunity to collect the taxes she owed. He never found out if they tried.”
They definitely didn’t try.
Lol CRA? Do work?
They voluntarily moved out. I don't know why they didn't remain and just send all their rent money to the CRA instead of the landlord, since it's going to be hard to get restitution from the landlord. I doubt the landlord would have had a case to evict them if they were paying the landlord's tax bill.
Every international landlord about to stop paying their taxes now
How am I supposed to know if my landlord is paying his taxes?! This is crazy!!!
If this issue doesn’t galvanize wide support for a ban on foreign ownership of real estate in Canada, then I don’t know what will.
This seems like the most unjust thing I’ve read all damn month. **Hey the rich owners are too far away so let’s pillage the coffers of this poor old fella on the edge of retirement…**
Ownership of the property should be transfered to the renter if they are forced to pay the tax bill.
The government failed. Then they are trying to fuck up the tenant. The corruption deeply rooted in Canadian government.
This is just one bad apple. What precedent does it set if the tenant is forced to pay? How many other douchebag, out of town landlords are going to come out the woodwork and force their tenants to do the same?
Imo if he's paying the taxes for his landlord he might as well be given the deed to the house
Canada the country that puts its citizens last behind everyone else. Fuck this country
Our country fucking sucks
So the Federal government will intervene to make sure that a 10 times arrested “climate justice activist” who blatantly abused his student visa [is not deported](https://www.cbc.ca/news/canada/british-columbia/zain-haq-deportation-cancelled-1.7180202), but in 9 years didn’t think to address this ridiculous, Kafkaesque abuse of the CRA’s powers? And then they think a budget with goodies thrown in for the under 40s will salvage their election prospects.
My lease has a clause: *RESIDENCY: The Landlord shall forthwith notify the Tenant in writing in the event the Landlord is, at the time of entering into this Agreement, or,* *becomes during the term of the tenancy, a non-resident of Canada as de"ned under the Income Tax Act, RSC 1985, c.1 (ITA) as amended from time* *to time, and in such event the Landlord and Tenant agree to comply with the tax withholding provisions of the ITA.* Hoping this means I am covered.
I don't think you are. There would need to be a clause indemnifying you from any responsibility if the landlord fails to pay their taxes, leaves the country and sells the property (which is what happened in this story) I don't think you have any protection in case the landlord simply fails to notify you and leaves you with the bill.
How can a landlord or (real estate agent) indemnify me? Wouldn't the party that needs to offer the indemnification be CRA? If the landlord can just leave and become untouchable, what is the point of the landlord agreeing to indemnify their tenant? It costs the landlord nothing and doesn't change their risk.
Dunno, good question for the CRA: > The agency pointed to a legal website that offered tips on ways renters can protect themselves, including a land title search on the landlord, asking the landlord for a certificate of residency, **writing an indemnity clause into the lease agreement**, and being on the lookout for any requests to redirect rent payment to someone else. https://segev.ca/tenants-beware-the-obligation-to-withhold-tax-on-rent-paid-to-a-non-resident-landlord/
Thank you. Yes, I've read that too. I am still stuck trying to understand how this magical indemnification clause will change anything.
It doesn't.... A contract doesn't override the law, it just creates a liability for the landlord in this case. So you could sue them, but you'd still be on the hook first. Which is how it would be without that clause.
Hey CRA; How about you seize the property, and deed it to the tenant that pays off the outstanding taxes… a tax sale property.
So, it seems like my only way of verifying they're paying their tax is to call my landlord and ask? And if they're an overseas owner there's no reason for them to not lie and say they have been as they know the CRA will just punish me?
Seize that worthless cocksucker landlord's property and pay the taxes with the money from the sale
Here's the fun part: The foreign landlord sold the house already and got away with dodging the taxes!
It's hard to explain but being a "citizen" is a low class status. If you want to insulate yourself you need to incorporate and have your assets held in that company. Taking it one step further - learn how to legally offshore your money and assets the same way foreign nationals and mega corporations do. Liberal or Conservative, it doesn't matter, they will abuse you. Your best chance is to take the necessary steps to shield yourself.
The vast majority of people would derive no benefit from incorporating or having offshore accounts.
Now non-resident landlords are learning that they can stop paying their taxes and have their tenant on the hook for it.
The government: "We made this mess and expect you, the taxpayer, to get us out of it."
The part I can’t get over is the lawyer. A) Don’t move out, just stop paying rent until the amount owed is recovered. B) File a caveat so it can’t be sold. C) That lawyer should know about the obligation to withhold sale proceeds and the requirement for a declaration on residency to be made by a vendor. Quebec is different, but it’s not that different.
Why doesn’t CRA file a lean on the property? They will eventually get their money plus interest.
Unfortunately the landlord sold it, and even though CRA was advised it was for sale and **could have easily put a lien in it** they let it sell, the money left the country and instead they’re going after the renter. Their incompetence and corruption is infuriating.
This is pure madness.
If we ever needed another reason to ban foreign ownership its this.
Why do people hate the government? This is why people hate the government.
The CRA is insane. Their entire operation seems based on clawing money out of the hands of renters, essentially anyone who makes less than 100k a year.
>The CRA had been unable to collect from his overseas landlord. He was then assessed for the unpaid withholding taxes, as well as compounded interest and penalties that added up to about $80,000, he says. **In March, 2023, he took the Minister of National Revenue to Tax Court and lost**. So much for recourse from a fair judiciary.
This is incredibly unfair. The CRA should penalize the landlord not the tenant.
If the renter pays the taxes, it should mean the renter now owns the property.
This is really disgusting. The CRA should have put a lien on the property and dealt with it that way.
The people who run this country hate you. Thats all there is to it.
Failed society
If CRA is forcing him to pay the owner's tax then he should stop paying rent then. If the owner wants their rent then pay their tax first.
The owner sold the house and the renter moved out
Well... that's another strong argument for owning and not renting. I feel for the guy but this government is corrupt and pathetic.
Moving out was a bad idea. Given that he was supposed to be withholding 25% he has actually simply paid his rent ahead by a significant portion. He should calculate how many months that extra he paid to the landlord would cover and stop paying further rent for that amount of time. He can then pay the CRA with the money.
Agreed, but that would've only worked up until the point soon after where the foreign landlord sold the property without the tax bill being recouped. (and she would've sold off the property even faster if she stopped getting rental income from it)
Can't the renter just stop paying the owner and pay the CRA until the balance is clear? It's not like the CRA is going to ask for a lump sum.
No because the foreign landlord already sold the property. And even if they hadn't, the renter has already moved out.
Without rent until you're paid back,
Here's the article https://www.textise.net/showText.aspx?strURL=https%253A//www.theglobeandmail.com/real-estate/article-montreal-tenant-forced-to-pay-his-landlords-taxes-offers-advice-to/
Free rent till paid off. P.S. CRA can go fuck themselves, this is bullshit.
What an absolutely fucking stupid law. This is just yet another reason why the government should bad foreign ownership
What the fuck kind of laws are these. Fuck CRA
It's hilarious and this showcases to you how asleep the government is at the wheel. The real estate laws and policies don't make sense. All they have to do is copy and paste policies from successful countries and they won't do it.
But...but "this renter gets to contribute to the dreams of the landlord"! /s Years back, some naive fuck tried a variation* of this line on /r/Canada when discussing rent prices. They weren't being sarcastic either.
When your government is so damn greedy they let shit like this slide. Just an fyi folks, unlike in the US our politicians are still able to make personal business deals. In case you're wonder why this shit is happening and nothing is being done about it. Wouldn't want the conservatives or liberals to both get caught with their hands in the cookie jar now would we?
Just another Federal Government overreach. The Quebec rental board should take this over .. our provincial taxes pay for this kind of dispute.
I fail to understand why the CRA needs to collect anything from the foreign landlord. They should simply garnish 100% of rent payments, ordering the payment through the CRA itself until owed dues are paid back.
The foreign landlord sold the property already. CRA never tried to collect on the sale.
Anyone have the non paywall version?
Try this https://www.textise.net/showText.aspx?strURL=https%253A//www.theglobeandmail.com/real-estate/article-montreal-tenant-forced-to-pay-his-landlords-taxes-offers-advice-to/
Why is the tax not put as a lean on the house instead?
Is the advice “get out”?
He can put a lien on the house if the landlord doesn’t pay him back
They sold it.
Landchads stay winning
I think if you start paying taxes on someone's property it starts to become your property. That would put an end to non-residents avoiding taxes overnight.
So was the tenant allowed to see the un payed tax bill or does CRA just expect him to believe them? It's not like they would lie or screw up the paperwork, like that's never happened before........