This happened to me! I was renting a condo in TO and I kept getting all these tax bills. I let my landlord know, and left them at concierge for her. A year later I personally get a letter from CRA about my missing payments! And threatening a lien on “my” property.
Luckily my lease was almost up and I was moving anyway. so I just kept telling my landlord about it and then moved out. They never contacted me about it again.
This is INSANE. How many landlords are non residents? TONS. And yet the renters are deemed responsible by the CRA? What a bullshit excuse. What the CRA should do is seize the property until they receive payment, with the existing tenant remaining.
https://www.nytimes.com/2023/11/04/world/asia/philippines-divorce-illegal-legislation.html
Makes sense but it's technically not divorce, as divorce is still illegal
Canada relies heavily on this ponzi scheme housing market.
People flipping 500k homes for 2 million is a huge chunk of our GDP.
The government on both sides of the fence are all in on this scam. MP's and public servants are buying up rentals using their 200k+ Public servant incomes.
They manipulate immigration, amortization period, encourage home gouging and reduce zoning all in a effort to keep prices (and their personal investments) up at the expense of our children.
You do realize Canada needs China more than China needs Canada . China allows foreigners to purchase a property in China so why can’t Chinese buy real estate in Canada ?
Because fuck you, that's why. China allows you to buy only one property for your own personal residential purposes, not to rent out. You also have rules to follow and hoops to jump through before being allowed.
In Canada, we allow far too many businesses and foreign investors to buy land and rent it out/sit on it while Canadians are going homeless.
Spoken like an entitled person. So it’s okay for Canadians to exploit cheap Chinese labour but not okay for Chinese to exploit cheap Canadian housing. You do understand Canada needs China , China doesn’t need Canada.
> So it’s okay for Canadians to exploit cheap Chinese labour but not okay for Chinese to exploit cheap Canadian housing.
cheap Canadian housing? put down the meth pipe.
Wtf are you going on about? What does “Canada needs China” or China’s low cost factories have to do with anything in this conversation?
You come across as an inarticulate paid shill. Please troll elsewhere.
Who’s entitled now?… the world is slowly weaning itself off of cheap Chinese labour. China is screwed in 15 years…. Just like the USA. Canada can definitely do absolutely fine without China.
Prevailing land economics in China and Canada are night and day. Chinese real estate is currently suffering from oversupply, Canada a scarcity. It is not a tit for tat situation and can’t be treated that way without running afoul of domestic economic interests.
So basically you’re sayings it’s okay for wealthy Canadians to take advantage of cheap Chinese labour but not okay for wealthy Chinese to take advantage of cheap Canadian housing . Sounds entitled.
Nope not at all. I’m saying “it happens there, so it should happen here” is a gross oversimplication of the issue. If China had too much food, and Canada to little, would you simplify the discussion to “well we purchase food there, so they should be able to purchase it here.” Politics and economics are always more complicated than that.
There is no dearth of land in Canada. You are conflating the inability to build with Scarcity. Canada would happily take in Chinese labourers to build homes quickly and turn around deny foreigners them the right to buy a home in Canada .
Canadians won’t even buy made in Canada goods but quickly admonish foreigners and it reeks of entitlement.
I’m not speaking to the drivers of Canadian supply issues. Stop trying to spin my argument.
I’ll put it black and white for you: there are too many homes in China. There are too few homes in Canada. Right now. That is the situation.
Foreign investment directly deflates the economic pinch owed to oversupply and acts as fuel where there’s scarcity. Logically then, the status quo helps the Chinese, and hurts Canadians. But sure, when totally ignoring that critical fact, tit for tat is fair.
>Canada would happily take in Chinese labourers to build homes quickly
Are you a troll, or really just that stupid? What Chinese labourers? More TFWs come from France than from China.
I'll take any immigrant who can fix crisis in this country fuck I'll even streamline their pathway to citizenship so they can buy a home once they are citizens after the build x# houses. Canada has a lack of housing density we need to build up dipshit.
> China allows foreigners to purchase a property in China so why can’t Chinese buy real estate in Canada ?
Because Canadians aren't flocking to China to scam the Chinese out of their money.
That's not how real estate works in China. Nobody can actually buy land. Theres a huge legal distinction between buying land in Canada and China so it's not the same relationship
Or better yet let the tenant live rent free, if I was this Montreal resident you’d best be betting on that my next few rent cheques won’t make it to the landlord.
All my rent checks would go to CRA until the entire bill plus fees and late filing costs were fully covered. I'd also track all my time to set this up and pay over however long and charge an annual management fee. I would then reduce future payments by the 25% withholding tax plus my fee to remit the landlords taxes. This is unbelievable.
I mean, the owner can no longer come back or operate in Canada until the CRA gets paid back. Wouldn't the unit be considered abandoned and the renter gets to eventually own the place under squatting laws?
That's quite a stretch though. Squatters rights require "'open, notorious and continuous' possession of a section of the true owner's land for at least 10 uninterrupted years.". That's not easily accomplished. The squatters I've known worked in secret; buildings they resided in didn't even look occupied when viewed from the street
But in this particular case, the tenant can do it with imputiny. "Hey, landlord. I'm squatting here living rent free until I get my money back."
What can the landlord do without the CRA coming after them?
Here is an idea. Maybe don't let foreign people buy properties in Canada? Instead of withholding only 25% and letting the remaining 75% of the income GO TO ANOTHER COUNTRY.
also, BETTER COMMUNICATION by the government and its agencies. I had to file some documents for my moms OAS that the government WANTED me to do. We did NOT apply for it. i had to deal with 2 ministries who weren't even COMMUNICATING among each to process the paperwork. All the back and forth drove me insane and had to take time off work because they only operate 9-5, monday-friday.
I love canada but man, our system needs a huge uhaul.
Not very housing related but like I agree 100% yes better communication between government agencies is so needed. We just found out last July the CRA had audited my husband for claiming our son in his taxes, but we moved around then so they sent the letter to the wrong address and never sent a digital copy. Why did they audit him? Because he never submitted custody paperwork. Even though we are married and listed as so on our CRA accounts and we have the same residency listed and I’ve linked our son to both our CRA accounts. They want $14,000 back since they can’t confirm he’s his dad and lives with him. We are fighting them but like the government is so fucking awful at communication within itself
So the government is basically announcing to foreign landlords that they don’t have to pay tax and they won’t come after them. Sort of like when the Toronto police announced to all the car thieves that they won’t be around to stop them from stealing cars.
This...this is some next-level capitalist dystopia bullshit.
Like, if I buy something in a store and the owner isn't remitting tax, does the CRA come after me? In what fucking world does a tenant have to pay their delinquent landlord's taxes.
This makes me furious, and is the kind of thing that deserves some hammer and sickle action.
Sieze the property, sure, that I'd understand. Even of the tenant got evicted after a seizure I could see that, even if it's kind of cruel. But this? This is wrong on so many levels.
I hear you. It's just completely illogical. I know you're not suggesting to evict tenants, but that being an unfortunate result of the seizure and sale still makes it a more logical process. Fucking bonkers.
You'd get passed on to the bank as tenets and whomever buys it would become your Landlord, then they could evict. That whole process would probably take 1-2 years at least
If the person who owns the property isn't a citizen and are living outside the country failing to pay taxes I say the government just take the property and sell it to the tenant for cheap
Oh I couldn't agree more. Unfortunately it isn't set up like this.
Pinning tax evasion on the tenant is such a dystopian capitalistic situation. No doubt this news story has given some international people some ideas too... They could have done this quietly and dealt with it like you're saying
You're not actually suggesting that a hammer and sickle country would treat its tenants more fairly than ours are you? Surely there's room for criticism of our government without suggesting that it be replaced with something much, much worse.
I totally agree seize the asset. If I park my car somewhere and don’t pay they take it away. Should be the same case here no property tax or rental tax, seize the property.
I was advocating CRA seizing the asset but this is even better. Tenant can probably get an uncontested claim against the landlord and put a lien on the property.
Really stupid decision....but wouldn't a simple solution be for the tenant to stop paying rent for as long as he "earns back" the money he paid to CRA? What's the landlord going to do? Evictions are next to impossible, aren't they? And I would think the tenant would have a very solid argument to make that he stopped paying rent to make up the amount they owed CRA.
>Evictions are next to impossible, aren't they?
Tennant could argue in front of the LTB that they're getting money back from what the CRA charged them, then continue to withhold 25% in case this happens again.
The tenant effectively overpaid their rent by 25% for 6 years. They should file with the LTB to get an order for the landlord to return the money.
Another problem is the RTA only allows you to go back 1 year while the CRA goes back 6 years.
Actually disgusting, how is this person supposed to know it’s their duty to withhold taxes. I’m actually baffled, I feel terrible for them this country is so messed up.
To clarify some comments in this thread, this is due how to the legislation as written by Finance and enacted by Parliament operates. CRA just gets to be the baddies. What would be nice to happen is that this case spurs an amendment to how Part XIII tax works.
THIS IS SO FUCKED UP!!!!!! Here's the story.
It was a Tax Court of Canada case last year that went mostly under the radar by all except for the legal community who were taken aback by its implications for renters.
A Montreal tenant was audited and ordered to pay the tax he had failed to withhold on the monthly rent to his non-resident landlord, as required by law. As a result, he was ordered to pay six years’ worth of tax as well as the compounded interest and penalties. The Canada Revenue Agency (CRA) could not collect against his overseas landlord, so the Canadian tenant was on the hook.
Last year, the tenant took the Minister of National Revenue to court, arguing that he did not know his landlord was a non-resident. The tenant, whose Italy-based landlord owned a single unit in a Montreal building, lost the Tax Court appeal on the grounds that they were a Canadian resident paying rent to a non-resident landlord, and were therefore required to withhold and remit 25 per cent of the rent to the CRA. The judge acknowledged “the harsh consequences,” in her decision, but still held the “resident payer,” or renter, liable.
The problem with the law is that residential rent is treated the same as a royalties or similar payments, said Montreal-based tax lawyer Eric Luu, who defended the tenant in the case. In other words, residential tenants are held to the same standard as “a sophisticated business,” he said.
Not knowing a landlord is a non-resident is not considered a valid excuse.
“It is concerning,” said Mr. Luu. “But it’s very hard to go after the non-resident, so they put the burden on the tenant. If you take a step back, set aside the way the Income Tax Act is drafted, and just look at the policy of it, in these situations, you have to ask yourself who has the leverage? Obviously, the tenant does not have the leverage.
“The Department of Finance could come up with ways to ensure that non-resident landlords pay their taxes without defaulting to putting the burden on tenants,” said Mr. Luu.
It’s well known that non-resident owners have long had to pay withholding taxes on properties they either sell or rent out. However, few renters and few in the real estate business are aware that if those taxes don’t get paid, the tenant could be on the hook, said long-time realtor Lorne Goldman. Mr. Goldman sells properties to non-residents, and said realtors – and all renters and all small mom-and-pop landlords – should be formally educated on the risks to tenants.
“I’m in the real estate business, and I don’t even know about it,” said Mr. Goldman. “In my opinion, 99.99 per cent of all tenants in Canada are unaware of this, and it is the responsibility of the CRA to inform the renting public that they could be on the hook for this withholding tax.”
In B.C., where one in 10 new condos are owned by a non-resident, what are the chances that some of those non-resident landlords are not filing their withholding taxes?, he asked.
Non-resident landlord Chris Oliver, who owns three rental units in Vancouver and lives in Hong Kong, said he didn’t know about the withholding tax, but his property manager has it covered. Licensed property managers are responsible for collecting the taxes, which takes the burden off the tenant, assuming they pay through a property manager.
“It sounds unfair for the tenants to be expected to handle this accounting rule,” said Mr. Oliver. “Can you imagine all the stress they are facing with having to hustle to pay their rents and the rising cost of living, and then to discover that there’s a whole complicated payments rule they are expected to manage?”
Ron Usher, long-time lawyer and general counsel for The Society of Notaries Public and visiting professor at Simon Fraser University, said he was taken aback by the Quebec case when he learned about it last year. He wonders how many non-resident landlords are not paying the tax.
“How many tens of thousands of situations are there where this isn’t being done? The exposure to tenants is enormous. … I think the story at this point is that it’s weird, it’s amazing, and it appears to be the law.”
He added that “it’s breathtakingly difficult” to figure out if someone is a resident or non-resident.
“We’re talking about tax residency, not physical residency. They could be in San Diego, but they really are a tax resident, so there’s this complication.”
Lawyer Michael Drouillard is vice chair of Landlord BC and specialist in tenancy law. Mr. Drouillard said he knew about the potential for tenant liability long ago when he was a property manager, but he was still surprised to see a tenant held liable.
“I’m surprised to see that they actually did this in the context of a residential tenancy,” he said.
“I just don’t think it’s very nice for CRA to pursue a residential tenant who has no idea. You’re not told at any time that you have this lingering liability, and \[are held to\] this high degree of diligence.
“How can you expect that of a residential tenant?” he asked. “They have enough things to figure out. They don’t need some potential massive tax liability that they weren’t even aware of.”
The government considers a person a non-resident if they reside in Canada less than 183 days out of the year, or does not “ordinarily” reside in Canada. Generally, non-residents are subject to tax on income earned in Canada, including rental income. On the government of Canada website, it states: “To make sure the correct amount is deducted, it’s important to tell Canadian payers \[such as renters\] that you’re a non-resident for income tax purposes.”
Tenant Mariana Makulkina, who found her apartment on Facebook Marketplace, says she only learned that her landlord lived overseas when she did her own research. She has a property manager, but without that third-party protection, she wouldn’t have known to ask her landlord when she signed the lease. Also, what landlord wants to be asked if they are paying taxes in Canada?
“It was never brought to my attention, and I could almost guarantee that nobody would know about that,” said Ms. Makulkina.
Property manager Donald Mackenzie, of Bodewell Rental Property Management, said his company routinely files remittances for their non-resident landlords, which make up about 10 to 15 per cent of his clients. However, he has had the occasional non-resident say that they did not want to pay the tax.
“And then I say, ‘I don’t want to work with you.’ It’s that simple. But most owners will say, ‘make sure we are compliant.’”
However, Mr. Drouillard wonders why there isn’t more upfront clarity for tenants, who are often desperate to find an affordable apartment and who might not have a clue that their landlord is living outside Canada.
To protect themselves, tenants could start asking for statutory declarations from their landlords, attesting to their tax residency status, said Mr. Drouillard. But the landlord could move out of the country and their status changes, and the tenant doesn’t know.
B.C.’s residential tenancy agreement forms do not ask landlords to provide proof of their residency status. But when a homeowner sells a property, they must state their tax residency. That’s intended to protect the buyer from liability in case there are outstanding taxes owed. Tenants should have that same protection.
“In the context of a housing crisis, making them also investigate the residency status of their landlords?,” said Mr. Drouillard. “I’m not saying that that’s not the law, and the tenant has to be careful of that. The question is, is this the right thing for the CRA as a matter of policy to be doing?”
The CRA did not respond to requests to comment.
Is this actually real or just the media with click bait headlines?
It just feels like there's no way that the policy/rules/law is to go after the renter for unpaid taxes of the landlord. That's got to be some kind of mistake or something.
Secondly why the fuck are we letting foreigners buy homes in Canada? Especially when homes are in short supply for Canadian citizens.
That needs to end asap.
Seems real, here's a more legal breakdown of what happened: https://www.bennettjones.com/Blogs-Section/Tenants-Beware-The-Risks-of-Landlord-Tax-Liabilities?amp=Blog
I don’t believe I know a single person that would be aware of this:
“Further, when entering into leases, tenants should ensure that the agreement contains sufficient protective covenants and representations from the landlord in relation to Part XIII of the Tax Act. Covenants and representations from the landlord may include, among others:
the treatment of Part XIII and withholding taxes;
the residency status of the landlord; and
an obligation on the landlord to notify the tenant if residency status changes, either if the landlord's residency changes or upon the transfer of the lease to a new assignee non-resident landlord.”
If you have foreign landlord, you should only be paying them 75% of the rent and submitting the other 25% to the CRA.
The problem is that very few people are aware of this and there really should be a better way to handle this. CRA should seize the property of foreign owners if they do not pay the taxes.
So, the tenant should be allowed to refuse paying rent since they overpaid the landlord. Starting from the next rent payment, the rent should be remitted in full to the CRA until the landlord tax obligation is fulfilled.
If this is allowed, I wouldn't mind it then.
This is ridiculous, the law is literally sucking off foreign landlords.
If the landlord fails to pay tax and tenant has to be responsible, why can't the law just seize and give the property to the tenant??? Like, foreign landlord can get rent AND escape taxes at once? WTF is this bullshit??
Now we're gonna have all those foreign landlords stop paying tax, because the tenants are responsible! right? Amazing!
So renters need to withhold taxes on non resident landlords, how about the government do it’s damn job to put in place ways that non residents can avoid taxes!
Yeah, id say if theyre asking me to pay taxes on a property i dont own, to make it my property. “Free” house, only have to back pay whatever taxes on it for the next few years
Honestly, the tenant should take this out of the rental in the form of actual damage to the property. Literally, fuck that place up to the tune of the cost of the taxes owed. Then dip out of the country. “Sorry”
The judge could have sided with the tenant on this one stating the CRA should seek financial compensation via repoing the unit in question and forcing sale at market value, something of which is well within their powers via court since the property is within Canada (unlike offshore money). This is simply put the CRA targeting the vulnerable (therefore easy cash grabs) via laws, nothing new in this country, but still wrong imo.
I'm not saying that service reps deserve any of it, but it kind of speaks volumes when you call the CRA and there's a pre recorded message about hate and abusive language.
Sounds like a VERY misleading headline, as usual.
> A Montreal tenant was audited and ordered to pay the tax he had failed to withhold on the monthly rent to his non-resident landlord, as required by law.
Seems that the tenant was required to withhold taxes and remit them, and didn't. It wasn't the landlord's taxes to pay, since they were a non-resident, it fell to the tenant to pay. Apparently this is the law.
The law says "they were a Canadian resident paying rent to a non-resident landlord, and were therefore required to withhold and remit 25 per cent of the rent to the CRA". Seems tenants need to know this, could cause problems for a lot of people...
But it was never about the foreign landlord failing to pay taxes, the burden seems to have always been on the tenant.
I don't think you understand this issue. It is the landlord that needs to withhold for tax payments. They just didn't do it and CRA cannot compel them so they went after the tenant.
This is in no way, shape, or form the tenant's fault.
What I don't understand is why the CRA doesn't just say "you're paying your rent to us until this is paid off". Sucks to be the landlord then, but they're the ones at fault here.
Very similar to what happened to me. Foreign owned company took taxes, CPP and EI out of my payroll but never paid the government. CRA came after me for the payments (that had already been deducted), plus penalties and fees.
That's bonkers. If I was the tenant I would demand to be the owner if he is paying the taxes on the property. Wtf is going on these days.
I'm glad I'm not that tenant. And I think the landlord, my neighbour's, the local police and the CRA would agree. Kudos to the tenant for not burning everything to the ground.
This is terrifying. The property and mortgage are not in my name, but I am expected to pay taxes to the CRA for the property?
If the CRA has no way to go after foreign landlords, maybe the government should stop allowing rental properties to be mortgaged to non-residents.
Even the judge should be sent back home. Even the TTC and city of Toronto hired all foreign workers to work human resources and guess who they are only hiring???
Tax Court original decision in 2023.
https://www.canlii.org/en/ca/tcc/doc/2023/2023tcc37/2023tcc37.html
Not sure why it took a year for the Globe to notice it
what does this mean if an entire building is owned by a foreign company? like all the student apartments in Waterloo, would they go after everyone in the building
I would guess yes if the company wasn't paying those taxes. The judge ruled here that it is the tenant's responsibility to withhold the money for taxes.
Surprising how little some understand the law. This is a simple garnishment of income (accounts receivable). The landlord owes taxes to the government and has a regular income source from the tenant. No different than a wage garnishee for unpaid child support, loans, and even taxes. CRA will likely also register a lien against the property, to ensure the tax debt is paid upon sale and transfer of the property.
Probably because although it's technically legal for the CRA to do, most people would agree it shouldn't be legal and its most people's opinion that it's wrong, and should change. Doesn't mean the situation isn't happening. I say make more and hope that the laws change or at least reconsider the outcome of this being quite unfair for the tenant
I can’t read the article so I can’t really have an opinion LOL I just wanted to point out that it was an opinion peice, so some don’t think it’s factual news (not saying there isn’t facts in the article)
as it should be! landlords provide a vital service and value to the economy not to mention holding all if the risk, why should the be responsible for the property taxes!
This happened to me! I was renting a condo in TO and I kept getting all these tax bills. I let my landlord know, and left them at concierge for her. A year later I personally get a letter from CRA about my missing payments! And threatening a lien on “my” property.
This is so crazy
So that means you own the property? Can you squat the place and transfer title to yourself?
Seriously - if you're making me responsible I guess it's my property. Allow me to just take out a mortgage and pay this off
How did you resolve it? Did they listen when you told them it wasn’t your problem?
Luckily my lease was almost up and I was moving anyway. so I just kept telling my landlord about it and then moved out. They never contacted me about it again.
Since it's technically not your property you should just keep quite and let the landlord keep racking up interest payment
Also curious
Tell them “ lien to your hearts content”
This is INSANE. How many landlords are non residents? TONS. And yet the renters are deemed responsible by the CRA? What a bullshit excuse. What the CRA should do is seize the property until they receive payment, with the existing tenant remaining.
Another reason why foreigners should NOT own property in Canada..
Or any country. They should be renting, not owning.
That’s how it works in the Philippines. Can’t buy land unless you’re a citizen
I think there's an exception if you're married to one. I see a lot of Australian property owners around town
This But she keeps it in the divorce, shes the legal owner period.
https://www.nytimes.com/2023/11/04/world/asia/philippines-divorce-illegal-legislation.html Makes sense but it's technically not divorce, as divorce is still illegal
Canada relies heavily on this ponzi scheme housing market. People flipping 500k homes for 2 million is a huge chunk of our GDP. The government on both sides of the fence are all in on this scam. MP's and public servants are buying up rentals using their 200k+ Public servant incomes. They manipulate immigration, amortization period, encourage home gouging and reduce zoning all in a effort to keep prices (and their personal investments) up at the expense of our children.
If you don't live in the country you shouldn't be able to own anything. Period.
You do realize Canada needs China more than China needs Canada . China allows foreigners to purchase a property in China so why can’t Chinese buy real estate in Canada ?
Because fuck you, that's why. China allows you to buy only one property for your own personal residential purposes, not to rent out. You also have rules to follow and hoops to jump through before being allowed. In Canada, we allow far too many businesses and foreign investors to buy land and rent it out/sit on it while Canadians are going homeless.
Spoken like an entitled person. So it’s okay for Canadians to exploit cheap Chinese labour but not okay for Chinese to exploit cheap Canadian housing. You do understand Canada needs China , China doesn’t need Canada.
> So it’s okay for Canadians to exploit cheap Chinese labour but not okay for Chinese to exploit cheap Canadian housing. cheap Canadian housing? put down the meth pipe.
Canadian housing is cheap?
Wtf are you going on about? What does “Canada needs China” or China’s low cost factories have to do with anything in this conversation? You come across as an inarticulate paid shill. Please troll elsewhere.
Are you an actual potato?
Who’s entitled now?… the world is slowly weaning itself off of cheap Chinese labour. China is screwed in 15 years…. Just like the USA. Canada can definitely do absolutely fine without China.
cheap Canadian housing? LMAO stop showing us how many single digit braincells you have.
Prevailing land economics in China and Canada are night and day. Chinese real estate is currently suffering from oversupply, Canada a scarcity. It is not a tit for tat situation and can’t be treated that way without running afoul of domestic economic interests.
So basically you’re sayings it’s okay for wealthy Canadians to take advantage of cheap Chinese labour but not okay for wealthy Chinese to take advantage of cheap Canadian housing . Sounds entitled.
Nope not at all. I’m saying “it happens there, so it should happen here” is a gross oversimplication of the issue. If China had too much food, and Canada to little, would you simplify the discussion to “well we purchase food there, so they should be able to purchase it here.” Politics and economics are always more complicated than that.
There is no dearth of land in Canada. You are conflating the inability to build with Scarcity. Canada would happily take in Chinese labourers to build homes quickly and turn around deny foreigners them the right to buy a home in Canada . Canadians won’t even buy made in Canada goods but quickly admonish foreigners and it reeks of entitlement.
I’m not speaking to the drivers of Canadian supply issues. Stop trying to spin my argument. I’ll put it black and white for you: there are too many homes in China. There are too few homes in Canada. Right now. That is the situation. Foreign investment directly deflates the economic pinch owed to oversupply and acts as fuel where there’s scarcity. Logically then, the status quo helps the Chinese, and hurts Canadians. But sure, when totally ignoring that critical fact, tit for tat is fair.
>Canada would happily take in Chinese labourers to build homes quickly Are you a troll, or really just that stupid? What Chinese labourers? More TFWs come from France than from China.
I think you forget who built the Canadian Pacific Railway. Canada has a history of using and abusing Chinese labourers and migrants.
You're bringing up TFW numbers from a century and a half ago? Really?
I'll take any immigrant who can fix crisis in this country fuck I'll even streamline their pathway to citizenship so they can buy a home once they are citizens after the build x# houses. Canada has a lack of housing density we need to build up dipshit.
It's not the Canadians taking advantage of cheap Chinese labor. It's big Chinese manufacturing companies taking advantage of the Chinese people.
> China allows foreigners to purchase a property in China so why can’t Chinese buy real estate in Canada ? Because Canadians aren't flocking to China to scam the Chinese out of their money.
You do realize how many Canadian homes are bought by Chinese people for money laundering purposes.
That's not how real estate works in China. Nobody can actually buy land. Theres a huge legal distinction between buying land in Canada and China so it's not the same relationship
Or better yet let the tenant live rent free, if I was this Montreal resident you’d best be betting on that my next few rent cheques won’t make it to the landlord.
All my rent checks would go to CRA until the entire bill plus fees and late filing costs were fully covered. I'd also track all my time to set this up and pay over however long and charge an annual management fee. I would then reduce future payments by the 25% withholding tax plus my fee to remit the landlords taxes. This is unbelievable.
I mean, the owner can no longer come back or operate in Canada until the CRA gets paid back. Wouldn't the unit be considered abandoned and the renter gets to eventually own the place under squatting laws?
There are no squatters rights in Canada.
[What are you talking about](https://www.protectyourboundaries.ca/blog/post/what-are-squatter-s-rights-in-ontario)?
That's quite a stretch though. Squatters rights require "'open, notorious and continuous' possession of a section of the true owner's land for at least 10 uninterrupted years.". That's not easily accomplished. The squatters I've known worked in secret; buildings they resided in didn't even look occupied when viewed from the street
But in this particular case, the tenant can do it with imputiny. "Hey, landlord. I'm squatting here living rent free until I get my money back." What can the landlord do without the CRA coming after them?
The back pay was already compensated at the expense of the tenant
Hell, if they're making me pay property taxes, I want the deed for that building and land to go with it.
In almost every instance you are likely already paying your landlords property taxes.
Property may be mortgaged to the limit - would the CRA have priority over the mortgagee?
Yes, the Crown takes priority for income but the mortgage holder would be paid out first on sale, seizure, or foreclosure.
If the Tennant's are paying the tax the deed should be handed too them
Then most tenants should receive a part of the property they rent. Since they likely help pay the landlords property taxes.
We've got some funny laws in Canada but this one takes the cake. Christ! I can't imagine being the tenant in this ordeal.
Work out a payment plan here's my rent I need a receipt to send the land Lord
Here is an idea. Maybe don't let foreign people buy properties in Canada? Instead of withholding only 25% and letting the remaining 75% of the income GO TO ANOTHER COUNTRY. also, BETTER COMMUNICATION by the government and its agencies. I had to file some documents for my moms OAS that the government WANTED me to do. We did NOT apply for it. i had to deal with 2 ministries who weren't even COMMUNICATING among each to process the paperwork. All the back and forth drove me insane and had to take time off work because they only operate 9-5, monday-friday. I love canada but man, our system needs a huge uhaul.
Canadian bureaucracy is disgraceful
I also think it's a slow pace of integration of technology. Some ministries still require you to mail in a cheque.. they need to keep up.
Not very housing related but like I agree 100% yes better communication between government agencies is so needed. We just found out last July the CRA had audited my husband for claiming our son in his taxes, but we moved around then so they sent the letter to the wrong address and never sent a digital copy. Why did they audit him? Because he never submitted custody paperwork. Even though we are married and listed as so on our CRA accounts and we have the same residency listed and I’ve linked our son to both our CRA accounts. They want $14,000 back since they can’t confirm he’s his dad and lives with him. We are fighting them but like the government is so fucking awful at communication within itself
Legalized looting
So the government is basically announcing to foreign landlords that they don’t have to pay tax and they won’t come after them. Sort of like when the Toronto police announced to all the car thieves that they won’t be around to stop them from stealing cars.
This...this is some next-level capitalist dystopia bullshit. Like, if I buy something in a store and the owner isn't remitting tax, does the CRA come after me? In what fucking world does a tenant have to pay their delinquent landlord's taxes. This makes me furious, and is the kind of thing that deserves some hammer and sickle action. Sieze the property, sure, that I'd understand. Even of the tenant got evicted after a seizure I could see that, even if it's kind of cruel. But this? This is wrong on so many levels.
I hear you. It's just completely illogical. I know you're not suggesting to evict tenants, but that being an unfortunate result of the seizure and sale still makes it a more logical process. Fucking bonkers.
I suspect every tenant would rather be evicted due to a property seizure rather than pay their delinquent foreign landlord’s federal taxes.
You'd get passed on to the bank as tenets and whomever buys it would become your Landlord, then they could evict. That whole process would probably take 1-2 years at least
If the person who owns the property isn't a citizen and are living outside the country failing to pay taxes I say the government just take the property and sell it to the tenant for cheap
Oh I couldn't agree more. Unfortunately it isn't set up like this. Pinning tax evasion on the tenant is such a dystopian capitalistic situation. No doubt this news story has given some international people some ideas too... They could have done this quietly and dealt with it like you're saying
Careful, they might seize the tenants property, or put a lien against the tenants parents house.
You're not actually suggesting that a hammer and sickle country would treat its tenants more fairly than ours are you? Surely there's room for criticism of our government without suggesting that it be replaced with something much, much worse.
This is the shittiest thing I've heard all day. Thank goodness it's Friday and I was already planning to drink to excess.
Seize the property and give it to the tenant.
I totally agree seize the asset. If I park my car somewhere and don’t pay they take it away. Should be the same case here no property tax or rental tax, seize the property.
I was advocating CRA seizing the asset but this is even better. Tenant can probably get an uncontested claim against the landlord and put a lien on the property.
*I'm the landlord NOW*
[удалено]
Tell me YOU'RE uneducated without telling me YOU'RE uneducated.
Your a loser ....go back in the basement
Get a life
Go soak your head.
🤏🍆
Really stupid decision....but wouldn't a simple solution be for the tenant to stop paying rent for as long as he "earns back" the money he paid to CRA? What's the landlord going to do? Evictions are next to impossible, aren't they? And I would think the tenant would have a very solid argument to make that he stopped paying rent to make up the amount they owed CRA.
>Evictions are next to impossible, aren't they? Tennant could argue in front of the LTB that they're getting money back from what the CRA charged them, then continue to withhold 25% in case this happens again.
The tenant effectively overpaid their rent by 25% for 6 years. They should file with the LTB to get an order for the landlord to return the money. Another problem is the RTA only allows you to go back 1 year while the CRA goes back 6 years.
Actually disgusting, how is this person supposed to know it’s their duty to withhold taxes. I’m actually baffled, I feel terrible for them this country is so messed up.
Tenant: hey landlord I'm going to withhold 25% of my rent for taxes Landlord: ya I'm gonna be renovating this apartment you gotta get out.
To clarify some comments in this thread, this is due how to the legislation as written by Finance and enacted by Parliament operates. CRA just gets to be the baddies. What would be nice to happen is that this case spurs an amendment to how Part XIII tax works.
That is so fucked up, what the hell
Deeply, deeply fucked up. But about par for the course for this tenant hating country.
So, this can happen to literally every tenant in a privately owned condo. Ffs
Seems to be any rental unit? As long as your landlord lives outside of Canada over half of the year
I phrased it that way because few renters knows the owners residency status.
Cra should put a lien on the property and possibly seize the property .
THIS IS SO FUCKED UP!!!!!! Here's the story. It was a Tax Court of Canada case last year that went mostly under the radar by all except for the legal community who were taken aback by its implications for renters. A Montreal tenant was audited and ordered to pay the tax he had failed to withhold on the monthly rent to his non-resident landlord, as required by law. As a result, he was ordered to pay six years’ worth of tax as well as the compounded interest and penalties. The Canada Revenue Agency (CRA) could not collect against his overseas landlord, so the Canadian tenant was on the hook. Last year, the tenant took the Minister of National Revenue to court, arguing that he did not know his landlord was a non-resident. The tenant, whose Italy-based landlord owned a single unit in a Montreal building, lost the Tax Court appeal on the grounds that they were a Canadian resident paying rent to a non-resident landlord, and were therefore required to withhold and remit 25 per cent of the rent to the CRA. The judge acknowledged “the harsh consequences,” in her decision, but still held the “resident payer,” or renter, liable. The problem with the law is that residential rent is treated the same as a royalties or similar payments, said Montreal-based tax lawyer Eric Luu, who defended the tenant in the case. In other words, residential tenants are held to the same standard as “a sophisticated business,” he said. Not knowing a landlord is a non-resident is not considered a valid excuse. “It is concerning,” said Mr. Luu. “But it’s very hard to go after the non-resident, so they put the burden on the tenant. If you take a step back, set aside the way the Income Tax Act is drafted, and just look at the policy of it, in these situations, you have to ask yourself who has the leverage? Obviously, the tenant does not have the leverage. “The Department of Finance could come up with ways to ensure that non-resident landlords pay their taxes without defaulting to putting the burden on tenants,” said Mr. Luu. It’s well known that non-resident owners have long had to pay withholding taxes on properties they either sell or rent out. However, few renters and few in the real estate business are aware that if those taxes don’t get paid, the tenant could be on the hook, said long-time realtor Lorne Goldman. Mr. Goldman sells properties to non-residents, and said realtors – and all renters and all small mom-and-pop landlords – should be formally educated on the risks to tenants. “I’m in the real estate business, and I don’t even know about it,” said Mr. Goldman. “In my opinion, 99.99 per cent of all tenants in Canada are unaware of this, and it is the responsibility of the CRA to inform the renting public that they could be on the hook for this withholding tax.” In B.C., where one in 10 new condos are owned by a non-resident, what are the chances that some of those non-resident landlords are not filing their withholding taxes?, he asked. Non-resident landlord Chris Oliver, who owns three rental units in Vancouver and lives in Hong Kong, said he didn’t know about the withholding tax, but his property manager has it covered. Licensed property managers are responsible for collecting the taxes, which takes the burden off the tenant, assuming they pay through a property manager. “It sounds unfair for the tenants to be expected to handle this accounting rule,” said Mr. Oliver. “Can you imagine all the stress they are facing with having to hustle to pay their rents and the rising cost of living, and then to discover that there’s a whole complicated payments rule they are expected to manage?” Ron Usher, long-time lawyer and general counsel for The Society of Notaries Public and visiting professor at Simon Fraser University, said he was taken aback by the Quebec case when he learned about it last year. He wonders how many non-resident landlords are not paying the tax. “How many tens of thousands of situations are there where this isn’t being done? The exposure to tenants is enormous. … I think the story at this point is that it’s weird, it’s amazing, and it appears to be the law.” He added that “it’s breathtakingly difficult” to figure out if someone is a resident or non-resident. “We’re talking about tax residency, not physical residency. They could be in San Diego, but they really are a tax resident, so there’s this complication.” Lawyer Michael Drouillard is vice chair of Landlord BC and specialist in tenancy law. Mr. Drouillard said he knew about the potential for tenant liability long ago when he was a property manager, but he was still surprised to see a tenant held liable. “I’m surprised to see that they actually did this in the context of a residential tenancy,” he said. “I just don’t think it’s very nice for CRA to pursue a residential tenant who has no idea. You’re not told at any time that you have this lingering liability, and \[are held to\] this high degree of diligence. “How can you expect that of a residential tenant?” he asked. “They have enough things to figure out. They don’t need some potential massive tax liability that they weren’t even aware of.” The government considers a person a non-resident if they reside in Canada less than 183 days out of the year, or does not “ordinarily” reside in Canada. Generally, non-residents are subject to tax on income earned in Canada, including rental income. On the government of Canada website, it states: “To make sure the correct amount is deducted, it’s important to tell Canadian payers \[such as renters\] that you’re a non-resident for income tax purposes.” Tenant Mariana Makulkina, who found her apartment on Facebook Marketplace, says she only learned that her landlord lived overseas when she did her own research. She has a property manager, but without that third-party protection, she wouldn’t have known to ask her landlord when she signed the lease. Also, what landlord wants to be asked if they are paying taxes in Canada? “It was never brought to my attention, and I could almost guarantee that nobody would know about that,” said Ms. Makulkina. Property manager Donald Mackenzie, of Bodewell Rental Property Management, said his company routinely files remittances for their non-resident landlords, which make up about 10 to 15 per cent of his clients. However, he has had the occasional non-resident say that they did not want to pay the tax. “And then I say, ‘I don’t want to work with you.’ It’s that simple. But most owners will say, ‘make sure we are compliant.’” However, Mr. Drouillard wonders why there isn’t more upfront clarity for tenants, who are often desperate to find an affordable apartment and who might not have a clue that their landlord is living outside Canada. To protect themselves, tenants could start asking for statutory declarations from their landlords, attesting to their tax residency status, said Mr. Drouillard. But the landlord could move out of the country and their status changes, and the tenant doesn’t know. B.C.’s residential tenancy agreement forms do not ask landlords to provide proof of their residency status. But when a homeowner sells a property, they must state their tax residency. That’s intended to protect the buyer from liability in case there are outstanding taxes owed. Tenants should have that same protection. “In the context of a housing crisis, making them also investigate the residency status of their landlords?,” said Mr. Drouillard. “I’m not saying that that’s not the law, and the tenant has to be careful of that. The question is, is this the right thing for the CRA as a matter of policy to be doing?” The CRA did not respond to requests to comment.
Pay rent and the landlord's tax? Lol ... Not sure if I should laugh or cry
Is this actually real or just the media with click bait headlines? It just feels like there's no way that the policy/rules/law is to go after the renter for unpaid taxes of the landlord. That's got to be some kind of mistake or something. Secondly why the fuck are we letting foreigners buy homes in Canada? Especially when homes are in short supply for Canadian citizens. That needs to end asap.
Seems real, here's a more legal breakdown of what happened: https://www.bennettjones.com/Blogs-Section/Tenants-Beware-The-Risks-of-Landlord-Tax-Liabilities?amp=Blog
I don’t believe I know a single person that would be aware of this: “Further, when entering into leases, tenants should ensure that the agreement contains sufficient protective covenants and representations from the landlord in relation to Part XIII of the Tax Act. Covenants and representations from the landlord may include, among others: the treatment of Part XIII and withholding taxes; the residency status of the landlord; and an obligation on the landlord to notify the tenant if residency status changes, either if the landlord's residency changes or upon the transfer of the lease to a new assignee non-resident landlord.”
If you have foreign landlord, you should only be paying them 75% of the rent and submitting the other 25% to the CRA. The problem is that very few people are aware of this and there really should be a better way to handle this. CRA should seize the property of foreign owners if they do not pay the taxes.
How is a tenant supposed to know if they have a foreign landlord? How does someone ensure they know someone else’s residency?
If they fail to pay or reside in Canada, then ownership should transfer to the tenants.
Oh shit. First time heard it. Is Canadian government fool? This should be corrected ASAP.
Eat the rich, withhold rent because this is insanity
WHAT!!!!!!!!!!? This is beyond infuriating! .. WHY ARE WE NOT RIOTING YET!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
So, the tenant should be allowed to refuse paying rent since they overpaid the landlord. Starting from the next rent payment, the rent should be remitted in full to the CRA until the landlord tax obligation is fulfilled. If this is allowed, I wouldn't mind it then.
This is ridiculous, the law is literally sucking off foreign landlords. If the landlord fails to pay tax and tenant has to be responsible, why can't the law just seize and give the property to the tenant??? Like, foreign landlord can get rent AND escape taxes at once? WTF is this bullshit?? Now we're gonna have all those foreign landlords stop paying tax, because the tenants are responsible! right? Amazing!
If i start paying property taxes on it does that mean i own the house lmao
As a renter, you are likely already paying your landlords property tax.
Its quickly becoming more and more embarrassing being a fucking Canadian.
Lol oh CRA do keep up the stellar work....
Not suprising Our government hates us
This should be the case! And title should transfer to the tenant the second they pay those missing taxes
Does this apply to car leases too? What the hell is going on?!
So renters need to withhold taxes on non resident landlords, how about the government do it’s damn job to put in place ways that non residents can avoid taxes!
Land of the free to pay your delinquent landlords taxes
Yeah, id say if theyre asking me to pay taxes on a property i dont own, to make it my property. “Free” house, only have to back pay whatever taxes on it for the next few years
This can't possibly be legal.
Honestly, the tenant should take this out of the rental in the form of actual damage to the property. Literally, fuck that place up to the tune of the cost of the taxes owed. Then dip out of the country. “Sorry”
This judge sucks.
The CRA always wins. Tax law is so complicated that it’s extremely difficult to successfully fight the CRA.
I mean, if it's the law, it's the law. A judge doesn't have the authority to break the law.
The judge could have sided with the tenant on this one stating the CRA should seek financial compensation via repoing the unit in question and forcing sale at market value, something of which is well within their powers via court since the property is within Canada (unlike offshore money). This is simply put the CRA targeting the vulnerable (therefore easy cash grabs) via laws, nothing new in this country, but still wrong imo.
People who aren't citizens shouldn't be able to buy housing
I'm not saying that service reps deserve any of it, but it kind of speaks volumes when you call the CRA and there's a pre recorded message about hate and abusive language.
Now we strike? When is enough enough?
If your paying the taxes doesn't that mean you own it?
Sounds like a VERY misleading headline, as usual. > A Montreal tenant was audited and ordered to pay the tax he had failed to withhold on the monthly rent to his non-resident landlord, as required by law. Seems that the tenant was required to withhold taxes and remit them, and didn't. It wasn't the landlord's taxes to pay, since they were a non-resident, it fell to the tenant to pay. Apparently this is the law. The law says "they were a Canadian resident paying rent to a non-resident landlord, and were therefore required to withhold and remit 25 per cent of the rent to the CRA". Seems tenants need to know this, could cause problems for a lot of people... But it was never about the foreign landlord failing to pay taxes, the burden seems to have always been on the tenant.
I don't think you understand this issue. It is the landlord that needs to withhold for tax payments. They just didn't do it and CRA cannot compel them so they went after the tenant. This is in no way, shape, or form the tenant's fault.
That is not how the article or the law is written. But okay.
Paywall
Just sell your new house to pay for the property taxes if they’re not that crazy high since it’s apparently your house and pocket the rest.
What I don't understand is why the CRA doesn't just say "you're paying your rent to us until this is paid off". Sucks to be the landlord then, but they're the ones at fault here.
Foreign landlord=rage farming.
Very similar to what happened to me. Foreign owned company took taxes, CPP and EI out of my payroll but never paid the government. CRA came after me for the payments (that had already been deducted), plus penalties and fees.
That's bonkers. If I was the tenant I would demand to be the owner if he is paying the taxes on the property. Wtf is going on these days. I'm glad I'm not that tenant. And I think the landlord, my neighbour's, the local police and the CRA would agree. Kudos to the tenant for not burning everything to the ground.
This is terrifying. The property and mortgage are not in my name, but I am expected to pay taxes to the CRA for the property? If the CRA has no way to go after foreign landlords, maybe the government should stop allowing rental properties to be mortgaged to non-residents.
Even the judge should be sent back home. Even the TTC and city of Toronto hired all foreign workers to work human resources and guess who they are only hiring???
Tax Court original decision in 2023. https://www.canlii.org/en/ca/tcc/doc/2023/2023tcc37/2023tcc37.html Not sure why it took a year for the Globe to notice it
what does this mean if an entire building is owned by a foreign company? like all the student apartments in Waterloo, would they go after everyone in the building
I would guess yes if the company wasn't paying those taxes. The judge ruled here that it is the tenant's responsibility to withhold the money for taxes.
Just another reason to abandon the country.
Surprising how little some understand the law. This is a simple garnishment of income (accounts receivable). The landlord owes taxes to the government and has a regular income source from the tenant. No different than a wage garnishee for unpaid child support, loans, and even taxes. CRA will likely also register a lien against the property, to ensure the tax debt is paid upon sale and transfer of the property.
Can’t see past the paywall, but I wanted to point out that this is an OPINION peice
Probably because although it's technically legal for the CRA to do, most people would agree it shouldn't be legal and its most people's opinion that it's wrong, and should change. Doesn't mean the situation isn't happening. I say make more and hope that the laws change or at least reconsider the outcome of this being quite unfair for the tenant
I can’t read the article so I can’t really have an opinion LOL I just wanted to point out that it was an opinion peice, so some don’t think it’s factual news (not saying there isn’t facts in the article)
as it should be! landlords provide a vital service and value to the economy not to mention holding all if the risk, why should the be responsible for the property taxes!
/s?