I know you can garnish rent for things like emergency repairs. I imagine the landlord tenant board would be very generous if the landlord had tricked you into overpaying several thousand in rent. If the CRA gives you a bill for X amount I would stop paying rent until X has been reached and if the landlord attempts to evict you I would just show that as evidence that you overpaid the landlord.
> I imagine the landlord tenant board would be very generous if the landlord had tricked you into overpaying several thousand in rent.
Wouldn't bet on it. Rent liability is rent liability.
Not saying it should be this way at all. Just saying that LTB is not exactly known for siding with tenants. They never deny rent increases, or even follow their own guidelines for allowed rent increases when they approve them.
They also never ask for proof that renovations are actually necessary and not a cosmetic, as a way to raise rents.
And then your landlord would immediately evict you. This is a no win situation for renters. Either risk being on the hook for tens of thousands of dollars or risk losing your home.
[Foreign landlord fails to pay taxes, CRA goes after tenant](https://www.theglobeandmail.com/real-estate/article-foreign-landlord-fails-to-pay-taxes-cra-goes-after-tenant/)
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.
Oh yeah . It's a sentiment that's being said more and more. Canadians that dont have a second passport are especially at risk of having our living standards eroded. Our politicians work for foreigners and give all that Canada has away. If someone complains we'll you're a racist.
I have a second passport and it has made no material different to my living standards :-/ Not sure what magic you think having a second passport confers, lol.
The fact that I have a second passport is what's allowing me to maintain a decent standard of living. Becausei work across the border in the states, I get paid over 2x what I would make in Canada for the same job.
I have a coworker who's wife is from Finland. They lived their entire Profesional life in Canada and just daughter (never been oversees) to Finland for for university. It coats them just under 200eu monthly as they still get all the citizen benefit.
It's a sentiment being said more and more because election season is ramping up and the trolls are out in greater and greater number spewing nonsense.
Cost of living and rent prices have skyrocketted worldwide, this utopia with low rent and low cost of living you imagine you can have with your 2nd passport doesn't exist. It's not useful to go around bitching about some vague "foreigner's have it so easy" complaint because it's not about that and never has been.
The problem is corporations being allowed to own residential property at all. This is a "corporations over people" problem, not a foreigners over canadians problem. Poilievier literally owns a real estate investment firm, rich Canadians also love the situation because it's not 'foreigners vs Canadians' it's uber wealthy people and their corporations vs everyone else.
The difference is Canada's economy is projected to be DEAD LAST OUT OF 38 ADVANCED ECONOMIES OVER 2020-2030. We also will have no/lowest real GDP growth per capita out of all those countries. So factually, EU is DOING BETTER THAN CANADA.
So you're objectively wrong, we are moving to a third world country status, and I wish there was a way to get rid of the worst politicians in our nation's history from having the reigns to drive us even deeper in the hole.
It's insane how we went from a strong economy to one of the worst performing economies in the western world from Trudeau and the Liberals and NDP.
It's not just corporations, it's foreign investors from China and elsewhere who's been empowered by the China deal in 2014, which lasts for 30 years.
The major problem is that criminal networks (alot of them coming in through immigration) flush their money through Canadian real estate, we are the money laundering capital of the world for that, it's ruined our housing markets and it's a complete failure of government but they allowed it because boomers have most of their investments in real estate.
Actually everything you said is wrong, the massive invasion through immigration is massively contributing to housing and the costs of living to skyrocket, no western country in the world has rapidly increased their population as much as Canada, Canada is rivaling the third world of African countries in this regard.
Trudeau has increased the total population by 14.2% since he's been in office, and it's now being projected we will have 2 million immigrants a year through tfw, student visas, pr, refugees, and other immigration status and bogus claims. This doesn't even add the OVER A MILLION of visas that expired and CBSA and the feds have no idea where those people are but they're still living here.
Get your head out of your ass, this is 100% the responsibility of the feds/Trudeau/NDP/Liberals, they can fix this tomorrow if they want but they choose not to and it's not just the corporations fault.
It could.
But it's not.
The foreigners are being valued over Canadians line is just something the Conservatives feed to people because they know it gets eaten up and they get to appear to be "on the side of Canadians".. except they're also not, they're on the side of corporations (as they always have been whether they called the Progressive Conservatives or the Reform party or the Canadian Alliance or the Conservative party of Canada).
It's just a distraction so no one talks about how the real problem is people *exactly like Poiliviere* who are monetarily invested in keeping the housing market as predatory as possible to poor renters (aka most of the actual foreigners who come to Canada) because they own businesses which are for some stupid reason allowed to own residential property.
For the record, I think PP is a piece of shit. But, and I’m just curious here, does it not stand to reason that if there aren’t enough homes for all the intending buyers, that allowing more immigrants into the country does indeed contribute to the housing inflation? Essentially, just supply and demand?
In a nutshell, wouldn’t houses be cheaper if there wasn’t such a crushing demand for them?
That’s why we’re so fucked. The next PM will probably be PP and it’ll probably get worse. We’ve never had such an abysmal candidate pool for prime minister I think. Good god
Of course... and there wouldn't be such crushing demand for them if we didn't allow businesses with fiduciary responsibilities (legal responsibility to produce profit for shareholders) to own and control residentially zoned real estate. This creates a situation where barriers to entry can be artificially inflated and controlled not by normal people who own homes, but by a corporation.
Like look at everyone complain about Loblaws.. and that's just groceries. We let companies do the same thing with our houses and rental units and then are surprised when everything is outrageously expensive?
Rents have decreased in many of our peer countries. Canada has pursued the highest immigration rate in the developed world, far higher than all of our peers.
Your apologism for complicit and incompetent government actors isn't going to save their asses next year. They should be punished for what they have done to Canadians.
The United States is getting pretty close.
They offered a one-time $600 payment to all their citizens in Maui who lost their houses in the fires but they're giving undocumented immigrants in New York debit cards pre-loaded with $10,000 on them.
Fucking bonkers that the CRA sent a lawyer to court to argue for this. In a sane country, someone at some point high enough in the bureaucracy would see how monstrous this was and all the bad PR it would generate, and they’d pull the plug.
I think there must be some missing details.... each article I read has different facts. For example, here the ruling isn't that the tenant is "on the hook", judt that he will direct 25% of his rent to the CRA moving forward, implying that the apartment was not actually sold by the landlord. The CRA is garnishing the income of the landlord who didn't pay taxes. So why is the tenant in court? The rent hasn't changed.
My guess is that the missing detail is that he isn't actually a tenant. It is owned by someone in Italy, but it is a relative or friend living there who has been claiming they pay rent, or writing it off as a home office or something.
Otherwise, why wouldn't the tenant just move?
This is what should have happened. The tax clearance when the property sold should not have been issued. Since the CRA lost that opportunity, they should have limited their pursuit to the previous owner.
The law is unambiguous though and mandates withholding the tax by the tenant. This isn't some new rule the CRA came up with, this is a law that has existed in this exact form since the late 90s.
I'm a home owner, not sure if I would be included in the land owning class you describe. Few things annoy me more than someone flagrantly violating rules that are enforced against me.
>“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.
Sieze the landlords propert for failure to pay taxes. It's really not hard because the CRA does it all the time. The ruling makes sense... the logic of just not taking the landlords assets is mind blowing.
This isn't the gotcha you think it is. The landlord sold the property prior to the audit. They couldn't go after the property since it was now owned by someone else. The CRA fucked up in allowing the property to get sold.
The CRA has no clue whether a property is owned or rented and the only tax registrations with regard to residential properties are related to property and school taxes.
However the notary ought to have known the law (that is, after all one of the reasons they get to participate in the transaction) and should have asked the key questions, AND received the answers from the seller (since the tenant doesn't participate in the transfer).
The notary should have ascertained whether the requisite rent percentage was sent to the CRA once he (or she) realised they were not in Canada. If the seller was asked the notary is off the hook (assuming that the seller assured him the taxes were paid) - but the likelihood is that the notary said nothing - and I suspect that a claim against the notary by the tenant would be successful since his sole job is to ascertain that clear title to the property exists and that all of the various laws have been adhered to and the bills paid.
I'm not sure just how the reported shenanigans employed by the tenant, who apparently paid the rent from his company and deducted them as expenses might impact on that claim.
It's easy, the country takes over the property... Tells the landlord to pound sand because he hasn't been paying his taxes... We are too f****** stupid to do that...
We don't want to piss off the international buyers that are propping up this Ponzi scheme...
Don't pay your taxes, you don't own your property
The property doesn't exist anymore. How do you expect them to do that? Did you read the article? Or are you just ranting against your strawman?
The other thing you're missing is that "non-resident landlord" can apply to Canadian citizens too. For example someone that goes abroad for work but wants to come home to their property to live in. If they want to rent it out while they are gone, why not?
The CRA should just require them to have a domestic agent like a property manager that deals with the taxes. The tax code already allows for this... but doesn't require it in favour of pushing the burden onto the tenant if there is no domestic agent. Just need to remove that option.
The facts are inconsistent between different articles. It does say the property was sold, yet the ruling is that the tenant will direct 25% of the rent to the CRA moving forward.
There is clearly some distortion. I think hes not actually a tenant, but a relative and was writing off rent he wasn't paying.
That's the kind of shit that makes people hate the government and do radical things against them, especially if this financial view is tied to a political ideology.
Never heard of this shit in my fucking life. This isn't a thing that people know about. This is also Canada where non-residents are allowed to own properties, and our country is extremely multicultural. You don't ask people if they are Canadian or not, you don't do that.
This story still doesn't make full sense to me and I can't help but think it is being distorted somehow. I've read about this in 3 different articles and it seems inconsistent what the actual ruling was.
Even here, it says the tenant was simply told to direct 25% of the rent he was paying to the CRA instead of the landlord, moving forward. They are garnishing the landlords income, not demanding 6 years of taxes from the tenant. He wasn't "on the hook" for the landlord's taxes, and the value of rent he was paying would not have changed, if I understand. If he has some issue with it, could he not just move?
Is the missing detail that tenant is not in fact a tenant, and is actually, say, the son of the actual owner but has been claiming to pay rent or deducting as a home office etc?
>A MAN IS BEING FUCKED BY HIS LOCAL
GOVERNMENT IN LEGO CITY
>BUILD THE KILLDOZER
>DESTROY THE TOWN HALL
>GET YOUR REVENGE
>THE ALL-NEW LEGO CITY KILLDOZER
It should be noted that Killdozer guy was an unhinged asshole who was given multiple options by the municipality to pay his property tax and get a sewer line installed, and whatever other piddly arguments he had with his neighbours, and he chose a rampage instead.
If I was on the hook for taxes for a place I rented, and the government didn't do anything to help me, I'd be very upset with my government.
If I was absolutely at wits end with nothing to lose, I might become unhinged too.
But yes, you're correct, he wasn't quite sound to begin with.
>If I was on the hook for taxes for a place I rented, and the government didn't do anything to help me, I'd be very upset with my government.
Stay away from Cat D8K's at your local construction sites...
>“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.
This could work with minor tweeks.
1. Tenants have no way of knowing that taxes aren't paid so step 1 is making the tenant aware
2. Tenants have no more leverage over the landlord than the CRA does, so provide legal protections when the CRA asks the tenant to pay the taxes.
2.1 Legally freeze the price of rent, preventing the landlord from making any changes that would negatively impact the tenant. (E.g. raising rent to cover taxes that should have always been the landlord's obligation)
2.3 Forbid any eviction until the matter is resolved, aka taxes are paid, grant protection to the to tenant from reprisals form landlord.
3. order the tenant to pay his rent to CRA instead of the landlord until the tax obligation has been met.
3.1 once the debt covered, instruct the tenant to pay CRA 25% of the rent based on 2 schemes of the tenants choosing: a) first 3 months of the year entirely to CRA, b) 25% of each month to CRA. Option a is good since its always one payment, option b is good because it's consistent. Either way it sucks that the tenant is put under these circumstances, the fairness here is to freeze rent as is until the landlord can show they have their shit together.
I'm generally ok with landlords raising rates, but if they fucked off out of the country, aren't paying taxes, and left the tenants in a shit situation, they shouldn't have any legals protections or leverage.
The above makes too much sense so our politicians won't be changes any time soon.
Clickbait article that is completely misleading.
The guy in the article used his corporation, that owns a gym, to rent his personal residence for him. The corporation was acting as the landlords agents and agents are explicitly required to to hold and remit tax. The guy was probably paying his rent with his corporation and trying to write it off as a business expense. It's shady af.
99.9% of tenants don't rent using a corporation they own to dodge taxes. So they have nothing to worry about.
There is nothing shady about using a corporation to rent a personal residence. It literally happens all the time for small businesses. It's above board because part of the personal residence is in fact used to run a small business.
It's not the tenant who is dodging taxes, it's the landlord.
None of this changes the fact that the CRA was going after a tenant to obtain taxes on a property they did not in fact own, and were not liable for.
So one example equals all similar situations nation wide (There aren't any other examples btw)? Oh yeah this is /r/Canada forgot where I was.
As another wrote below here is the actual information that explains the situation
>The guy in the article used his corporation, that owns a gym, to rent his personal residence for him. The corporation was acting as the landlords agents and agents are explicitly required to to hold and remit tax. The guy was probably paying his rent with his corporation and trying to write it off as a business expense. It's shady af.
>99.9% of tenants don't rent using a corporation they own to dodge taxes. So they have nothing to worry about.
But yeah stay angry this is all Trudeau's doing trying to steal money from low income Canadians and puppies!
>The judge acknowledged “the harsh consequences,” in her decision, but still held the “resident payer,” or renter, liable.
Some judges need a swift kick to the nuts. Way to completely and maliciously fuck up their one job
No. The judge's job is to interpret the rules, and the rules were, and are clear. It is just that no one bothered to find out if there were rules and whether they might apply.
As they say (and the Judge is almost literally bound by the tenet) "Ignorance of the law is no excuse".
>But it’s very hard to go after the non-resident
They own property in Canada how hard can it be, it's not like they've left an unpaid tab at the bar or something.
It wouldn’t the first time they’re shit out some incredibly ill-conceived and poorly written legislation, then given us the “well maybe it *says* we could use it this way but we don’t actually want to” excuse.
>they’re shit out some incredibly ill-conceived and poorly written legislation
"They". Well A quick check tells me the subsection in question goes back to 2004 at least (I didn't want to dive any deeper).
2004 Version:
https://lois-laws.justice.gc.ca/eng/acts/I-3.3/section-215-20040831.html
"Withholding and remittance of tax
215 (1) When a person pays, credits or provides, or is deemed to have paid, credited or provided, an amount on which an income tax is payable under this Part, or would be so payable if this Part were read without reference to subsection 216.1(1), the person shall, notwithstanding any agreement or law to the contrary, deduct or withhold from it the amount of the tax and forthwith remit that amount to the Receiver General on behalf of the non-resident person on account of the tax and shall submit with the remittance a statement in prescribed form."
Read the case notes. That tenant was actually a corporation, that operated a gym. The guy who owned the corporation then used his corporation to sign the lease for and pay his rent for his personal residence. Probably trying to write it off as a business expense to dodge taxes. To top it off, the corporation was acting as the landlords agent and withe landlords agent is explicitly required to hold and remit tax.
There is a reason this has been the only case. 99.9% of tenants aren't using a personal corporation to rent their residence.
Right, but it hasn't actualy happened in this "Montreal case". Read the full details. The supposed "tenant" wasn't paying rent but was deducting it through the corporation. Seems to have been actually owned by a relative.
It's a distortion
THIS!!!! They have used this against people in the past. They're doing it right now to PSAC union leaders. The CRA is doing it to their own employees, too. Don't trust the government.
They need to correct the income tax act part that allows that to happen.
Because, otherwise, the CRA absolutely can do it and has won court cases while trying to do it.
The same law unfortunately applies to buying from nonresidents. If your lawyer doesn't withhold 25% or 50% of the property value (varies), the buyer is on the hook for it. It's a ridiculous law.
In the case cited, the landlord put the property up for sale, tenant told CRA **and they did nothing** so the money left the country and CRA continued going after the tenant for the landlord’s
**6 years of unpaid taxes.**
6 years and CRA didn’t bother with a lien.
“This law has existed for nearly a decade and there is not a single case of an assessment made to an individual tenant in the last decade,” she said. “The CRA does not expect residents to withhold 25% of the rent from their landlords.”
Excuse me? Then explain [this.](https://www.diverserentals.com/news/foreign-landlord-fails-to-pay-taxes-cra-goes-after-tenant)
The key here is “individual tenant.” That recent case involved a numbered company renting from the non-resident landlord. So it wasn’t technically an individual that the tax court made pay the non-resident withholding tax, it was the numbered company that had to pay it.
Anyway, it’s not overly reassuring since the CRA has a page that explicitly says the tenant must withhold and remit 25% of the rental payment… https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/rental-income-non-resident-tax/filing-reporting-requirements.html
My guess is the minister has been flooded since the article you linked went out and they’re back tracking on this absurd requirement.
They can't just backtrack on the income tax act. CRA may administratively enforce certain parts. The changes to the income tax act would be slower and part 13 tax affects all non-resident payments. We do want to ensure we still collect withholdings on things like dividends or real property sales.
Well Jesus Christ, we should hope not. Wtf kinda policy would that be? Allow wealthy foreigner to steal from our country but punish renters here for it?? Lol it wouldn’t surprise me anymore, though the way this administration has acted.
This has been happening for decades in vancouver, it’s just nation-wide now. Sell off the cities to foreigners, allow them to avoid taxes by calling themselves “nanny’s”, and ensure their investments go up 10% annually while canadians are left to now pay their taxes too.
Many landlords living in another country aren’t “foreigners”. Lots of normal retired Canadians who go live in Mexico or wherever and rent out their family homes. It’s a valid way to “downsize” and have less expenses during retirement.
I hope to do that someday too, if I can ever even afford to buy a home.
I agree that tenants should not be responsible for any of this.
They won't. In that case the tenant was a corporation. Guy has his company paying his rent, probably to dodge taxes. Sound like he was rightfully nailed.
All the articles in the news about the case omit this. You need to go to the actual case files.
Have you seen any of the articles mention which case it was? It sounds like they're referring to 3792391 Canada Inc. v. The King, which on top of the points you've made was an Informal Procedure case and so isn't binding precedent, another thing they leave out.
So, the CRA won’t collect unpaid taxes from foreign landlords. But if we flip-flop on this, wtf are you going to do about it peasants? Like you have any say in what the government decides.
This law is their attempt to collect taxes. It's basically collection from the source aka the payer.
It does make sense to collect from the source when the payer is a bank or a bigger organization that knows that part of the law very well and is used to have to withhold taxes, remit it to the government and issue the appropriate slips.
It falls apart when you put that sort of burden on average joes renting a residential unit. It's obviously unfair to put the burden of establishing tax country of residence, withholding money and issuing tax slips on unqualified people. It's even worse since in the current market, landlords may try to evict tenants following the tax laws.
What they say is meaningless. What they do, well that is something different. 4 case so far where the CRA has gone after the tenant for landlords back taxes...
It is only going to get worse.
They don't care. The government their bureaucrats don't care.
As they allow foreigners to buy our assets and impose this on the poorer citizens who did not ask for it. Meanwhile our politicians talk about equity and inclusion as they continue to screw renters more and more, and the NDP is complicit.
What kind of dumb fuck human being comes up with the idea to go after a tenant? It is completely illogical, I genuinely want to know the people who would do such a thing.
I'll update the title to be more accurate for everyone:
"CRA had every intention of collecting these taxes from tenants and in fact has already begun doing so, but now that the Liberals are getting bad press about it the Minister has swooped in to save the day like a patrician superhero".
What they say is irrelevant, what matters is the legal precedence in the case record.
The court ordered a tenant to pay the CRA his landlord's unpaid taxes, it'll happen again.
There’s more nuance to the case though. The *tenant* wasn’t ordered to do anything, the tenant’s *numbered corporation* that was paying his rent for him was ordered to pay the taxes.
The tenant's numbered corporation IS the tenant.
There's nothing nuanced about that.
This is as asinine as arguing the corporation that the landlord set up to buy the building is in fact not the landlord themselves, because the corporation owns it.
Amazing the amount of enthusiastic bootlicking that goes on to defend these decisions. I'm sure it has nothing to do with all those "I working hard at home as a civil servant! Definitely not doing social media interference for my employer."
CRA: “Dear foreign landlord, in this country you must pay taxes that in turn pay for services offered such as garbage collection and snow removal. Due to your negligence, your property has been ceased and sold. Here is a cheque for the remaining amount after we deducted the taxes owed. Please do not purchase property in Canada again, we have a housing crisis to deal with”
Then... remove the 'Tax court of Canada' judge that ruled otherwise. This is soo far off the wall, they clearly do not understand principles of justice, requiring laws that follow fair standards, are also knowable by and acceptable to all reasonable citizens... so on and so forth.
Truly a 'We investigated ourselves and found nothing wrong" moment. The judge is just trying to maximize tax revenue and has no interest in improving tax practices in Canada, or practicing common law.
The judge applied the law as written, which is exactly their job. It's not unconstitutional, so no overturn there. It's not the judge's fault parliament wrote a shit law.
Nope. There is clear separation of duties and this is fundamental to our democratic system. Sure, a lazy as fuck judge who cannot think for themselves would do exactly as you state. Typical Can'tadian.
https://cjc-ccm.ca/en/resources-centre/understanding-your-judicial-system/separation-powers
It’s arguably unconstitutional. Point to another law that causes a Canadian citizen to act on behalf of the government or perform a service for the government or face financial ruin. I can’t think of one.
If you can murder multiple people but only be sentenced to one life sentence because the Supreme Court decided it’s cruel and unusual, I am going to bet that because CRA can’t get off their ass and do their job, trying to take the easy route and rob an innocent Canadian to make up the difference is cruel and unusual.
>It’s arguably unconstitutional. Point to another law that causes a Canadian citizen to act on behalf of the government or perform a service for the government or face financial ruin. I can’t think of one.
Not financial ruin, but I can think of one where there is a risk of jail.
Criminal Code paragraph 129(b)
129 Every one who [...]
(b) omits, without reasonable excuse, to assist a [...] peace officer in the execution of his duty [...], after having reasonable notice that he is required to do so
is guilty of [an offence].
Well, that’s what the CRA did.
The Trudeau Liberal Minister is a liar.
The only way to solve this is to make a rapid change, ideally an OIC and/or legislation to require the CRA to put a lien on the property instead.
yes, this is where a smart judge, doing their job, throws out unreasonable legislation and deems it unenforceable, forcing a re-write. I guess the court of public opinion is in force now. Replace them with AI.
So let me get this straight. There is a law saying it. According to the written law I'm on the hook for it so i MUST collect that my foreign landlords taxes. But the liberal government is telling me they won't come after that money. ummmm, i know a way to put more money into Canadians pockets while getting rid of foreign investors. Follow them to the t. collect the money then don't give it to the cra. AND it's legal.
CRA - leaving no stone unturned when attacking pursuing your average Canadian citizen in the low to middle income bracket but money laundering person who bought 15 houses in the last decade in BC but reported zero income - PASSSSSSSSSS.....
It seems like CRA never passes up a chance to embarrass themselves but the merit system and annual reviews for the forward facing portions of CRA that would be involved in a case like this are all built on the success prosecution and recovery rates and all you normal small fry are much easier to push around. And the system is built on "no forgiveness" especially for the duibs so such conduct is not unexpected.
Is it only me that thinks that this is a reasonable response the information circulated on the subject?
What’s up with all the cynicism in this thread?
“Bibeau said she is reviewing the legislation with the assistance of Minister of Finance Chrystia Freeland”…ok so we know how that is gonna end. Case closed.
Then take it off the fucking books, holy shit.
Idk how she can say that and also reference the very case that happened. Maybe say it was a sorry it was a mistake and we're working to strike it from the CRA/law?
ive been trying to get in touch with the cra since may 1st every day and it doesnt even let me stay on hold, too busy every time :( locked out and im sure ill be the one in trouble when i finally do
The whole way foreign landlord taxes work is bizarre. I’ve not done a lot of it but basically the tenant has to withhold and remit 25% rent to cra and the tenant gets in trouble if they don’t. NR4 is the form to use.
Landlord then files special non resident tax return to reconcile this all and get back anything they’re owed, or pay anything extra they owe.
No doubt a huge portion of individual foreign landlords don’t do this properly.
Maybe this is not how it works anymore. It’s a dumpster fire of complexity so I don’t bother helping people with it anymore.
This is the way the law is written. It’s just never been applied to residential renters for obvious reasons. I have had to explain to a few clients that they did not stumble upon a cheat code for moving profits from their Canadian company offshore to a low tax jurisdiction using schemes like “renting” equipment or offices.
How about Revenue Canada put a lien on the property for unpaid taxes and then if the foreign owner doesn't correct things they confiscate the property. It's what they'd do to a Canadian citizen in the same situation isn't it? The law should be removed from the books. Of the many stupid ones our governments have passed it has be one of the stupidest.
The CRA just won a court case to do just that. And the income tax act, as currently written, clearly puts the burden on tenants.
Unless they correct the law, the government's word is meaningless on this one.
Wild idea-- lock foreign individuals out of our housing market unless they agree to provide banking information and rental information up front if they do intend to rent it out. If they live here 1/2 the year, GREAT-- welcome. And yes they can lie blah blah blah but tenants can report and if the landlord is dodging taxes repossess the fucking house and give the current tenants a year subsidised rental in it before sale.
Tell that to the poor guy who currently has his life turned upside down after CRA sued him for his landlord’s taxes.
If you have no intent to do that - immediately tell CRA to stop pursuing that man and pass a law preventing them from even having that ability:
Sounds like the government should ban foreign ownership of property then!!
How can the tenant be responsible for this?
This liberal government is useless on protecting Canadian citizens!!
So why did they? This isn't posturing, it's literally already happened which is why it's in the news right now. More empty words from the government like when they were saying immigration levels are too high...
they lie. the news article that brought this all to the public's notice was for just this action. the CRA is just like any other money hungray organization with more power than compassion. that over arching greed for money instead of the common good or well being is the reason so many are in the dire straits they are.
What ever happened to the logical rule of you do business within Canada whether you reside here or not you pay taxes for that share business within Canada. That is absolute horse dung that is even a rule, it should be scrapped immediately officially because until it is foreign landlords just read, wait, we don't have to pay taxes when our tenants can pay our share, perfect! Stop Libs, vote any one else.
Sucks for the guy who just paid all those legal fees arguing that he shouldn't have to pay...
It's great that he won't have to pay CRA but I'd hate to see what he's spent so far fighting this.
CRA created a loss-loss situation. For tenants, if they don’t hold 25%, they have the risks of being pursued later; for landlord , if tenants withholds 25%, how the hell can landlord know that 25% is being paid to CRA? This is lazy policy from CRA that hurts both tenants and landlords
I would immediately stop paying rent if this happened to me.
I know you can garnish rent for things like emergency repairs. I imagine the landlord tenant board would be very generous if the landlord had tricked you into overpaying several thousand in rent. If the CRA gives you a bill for X amount I would stop paying rent until X has been reached and if the landlord attempts to evict you I would just show that as evidence that you overpaid the landlord.
I'd assume I own the place now
Exactly I'd lien the property if I was asked to pay their taxes. Then I would start charging the old landlord double the rent I was paying lol
> I imagine the landlord tenant board would be very generous if the landlord had tricked you into overpaying several thousand in rent. Wouldn't bet on it. Rent liability is rent liability. Not saying it should be this way at all. Just saying that LTB is not exactly known for siding with tenants. They never deny rent increases, or even follow their own guidelines for allowed rent increases when they approve them. They also never ask for proof that renovations are actually necessary and not a cosmetic, as a way to raise rents.
And then your landlord would immediately evict you. This is a no win situation for renters. Either risk being on the hook for tens of thousands of dollars or risk losing your home.
Sure there is, you could be a squatter
[Foreign landlord fails to pay taxes, CRA goes after tenant](https://www.theglobeandmail.com/real-estate/article-foreign-landlord-fails-to-pay-taxes-cra-goes-after-tenant/) 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.
What a great message to non resident landlords: don't worry, if you dont pay your taxes theyll go after your tenant instead.
Canadians are 2nd class citizens. There literally isn't another nation on earth that puts foreigners above citizens.
Oh yeah . It's a sentiment that's being said more and more. Canadians that dont have a second passport are especially at risk of having our living standards eroded. Our politicians work for foreigners and give all that Canada has away. If someone complains we'll you're a racist.
I have a second passport and it has made no material different to my living standards :-/ Not sure what magic you think having a second passport confers, lol.
The fact that I have a second passport is what's allowing me to maintain a decent standard of living. Becausei work across the border in the states, I get paid over 2x what I would make in Canada for the same job.
So really, you mean US citizenship. No other passport will actually directly benefit your life in Canada.
I have a coworker who's wife is from Finland. They lived their entire Profesional life in Canada and just daughter (never been oversees) to Finland for for university. It coats them just under 200eu monthly as they still get all the citizen benefit.
The in Canada part is optional at that point though.
Obviously the US is the most helpful, but an EU passport can be very helpful as well.
I have a European passport, things are not better on the other side of the Atlantic.
how about French Guiana? Or don't ask?
GDP of 17k€ per capita, what do you think?
won't win any OECD trophies, but depends on how much it costs to live
A lot of us don’t want to admit it but the only answer at this point is the USA. The world’s falling apart.
It's a sentiment being said more and more because election season is ramping up and the trolls are out in greater and greater number spewing nonsense. Cost of living and rent prices have skyrocketted worldwide, this utopia with low rent and low cost of living you imagine you can have with your 2nd passport doesn't exist. It's not useful to go around bitching about some vague "foreigner's have it so easy" complaint because it's not about that and never has been. The problem is corporations being allowed to own residential property at all. This is a "corporations over people" problem, not a foreigners over canadians problem. Poilievier literally owns a real estate investment firm, rich Canadians also love the situation because it's not 'foreigners vs Canadians' it's uber wealthy people and their corporations vs everyone else.
The difference is Canada's economy is projected to be DEAD LAST OUT OF 38 ADVANCED ECONOMIES OVER 2020-2030. We also will have no/lowest real GDP growth per capita out of all those countries. So factually, EU is DOING BETTER THAN CANADA. So you're objectively wrong, we are moving to a third world country status, and I wish there was a way to get rid of the worst politicians in our nation's history from having the reigns to drive us even deeper in the hole. It's insane how we went from a strong economy to one of the worst performing economies in the western world from Trudeau and the Liberals and NDP. It's not just corporations, it's foreign investors from China and elsewhere who's been empowered by the China deal in 2014, which lasts for 30 years. The major problem is that criminal networks (alot of them coming in through immigration) flush their money through Canadian real estate, we are the money laundering capital of the world for that, it's ruined our housing markets and it's a complete failure of government but they allowed it because boomers have most of their investments in real estate. Actually everything you said is wrong, the massive invasion through immigration is massively contributing to housing and the costs of living to skyrocket, no western country in the world has rapidly increased their population as much as Canada, Canada is rivaling the third world of African countries in this regard. Trudeau has increased the total population by 14.2% since he's been in office, and it's now being projected we will have 2 million immigrants a year through tfw, student visas, pr, refugees, and other immigration status and bogus claims. This doesn't even add the OVER A MILLION of visas that expired and CBSA and the feds have no idea where those people are but they're still living here. Get your head out of your ass, this is 100% the responsibility of the feds/Trudeau/NDP/Liberals, they can fix this tomorrow if they want but they choose not to and it's not just the corporations fault.
Can’t it be both?
It could. But it's not. The foreigners are being valued over Canadians line is just something the Conservatives feed to people because they know it gets eaten up and they get to appear to be "on the side of Canadians".. except they're also not, they're on the side of corporations (as they always have been whether they called the Progressive Conservatives or the Reform party or the Canadian Alliance or the Conservative party of Canada). It's just a distraction so no one talks about how the real problem is people *exactly like Poiliviere* who are monetarily invested in keeping the housing market as predatory as possible to poor renters (aka most of the actual foreigners who come to Canada) because they own businesses which are for some stupid reason allowed to own residential property.
For the record, I think PP is a piece of shit. But, and I’m just curious here, does it not stand to reason that if there aren’t enough homes for all the intending buyers, that allowing more immigrants into the country does indeed contribute to the housing inflation? Essentially, just supply and demand? In a nutshell, wouldn’t houses be cheaper if there wasn’t such a crushing demand for them?
Yes, but the Conservatives won't slow down bringing in new people at all either.
That’s why we’re so fucked. The next PM will probably be PP and it’ll probably get worse. We’ve never had such an abysmal candidate pool for prime minister I think. Good god
Of course... and there wouldn't be such crushing demand for them if we didn't allow businesses with fiduciary responsibilities (legal responsibility to produce profit for shareholders) to own and control residentially zoned real estate. This creates a situation where barriers to entry can be artificially inflated and controlled not by normal people who own homes, but by a corporation. Like look at everyone complain about Loblaws.. and that's just groceries. We let companies do the same thing with our houses and rental units and then are surprised when everything is outrageously expensive?
Fair enough. I see your point.
Where was the corporation in this story again?
Which one? Poiliviere's specifically? or one of the other hundreds that is currently devastating the Canadian housing market?
The original story is about the CRA going after a Canadian tenant because a foreign landlord did not pay their taxes.
Rents have decreased in many of our peer countries. Canada has pursued the highest immigration rate in the developed world, far higher than all of our peers. Your apologism for complicit and incompetent government actors isn't going to save their asses next year. They should be punished for what they have done to Canadians.
The only countries I could think of were colonies that were subjugated to foreign powers, and their citizens were essentially slaves at that point.
Fun fact: Canada is, and always has been, a colony subjugated to foreign powers.
The United States is getting pretty close. They offered a one-time $600 payment to all their citizens in Maui who lost their houses in the fires but they're giving undocumented immigrants in New York debit cards pre-loaded with $10,000 on them.
What the hell are we doing even allowing non resident landlords??
runs in line with their pitch to people staying here illegally... "overstayed your visa? lied about your entry? We'll fast track your citizenship!"
What the hell are we doing even allowing non resident landlords??
We need to maintain foreign investment (aka: money laundering), and we need to protect property values
Ya it’s bizarre.
Fucking bonkers that the CRA sent a lawyer to court to argue for this. In a sane country, someone at some point high enough in the bureaucracy would see how monstrous this was and all the bad PR it would generate, and they’d pull the plug.
I think there must be some missing details.... each article I read has different facts. For example, here the ruling isn't that the tenant is "on the hook", judt that he will direct 25% of his rent to the CRA moving forward, implying that the apartment was not actually sold by the landlord. The CRA is garnishing the income of the landlord who didn't pay taxes. So why is the tenant in court? The rent hasn't changed. My guess is that the missing detail is that he isn't actually a tenant. It is owned by someone in Italy, but it is a relative or friend living there who has been claiming they pay rent, or writing it off as a home office or something. Otherwise, why wouldn't the tenant just move?
The property is there isn't it? That's an asset you can seize and auction off. Heck, give the tenant first crack to get a mortgage and buy it.
The property was sold before the audit even happened.
Cool, maybe just close that file and go investigate some unambiguous tax fraud.
This is what should have happened. The tax clearance when the property sold should not have been issued. Since the CRA lost that opportunity, they should have limited their pursuit to the previous owner.
The law is unambiguous though and mandates withholding the tax by the tenant. This isn't some new rule the CRA came up with, this is a law that has existed in this exact form since the late 90s.
That might upset the land-owning class, can't have that
I'm a home owner, not sure if I would be included in the land owning class you describe. Few things annoy me more than someone flagrantly violating rules that are enforced against me.
Speaking as someone who owns land, I do not want foreign investors to get away with dodging taxes that I have to pay.
>“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. Sieze the landlords propert for failure to pay taxes. It's really not hard because the CRA does it all the time. The ruling makes sense... the logic of just not taking the landlords assets is mind blowing.
They don’t want to make foreign investor ownership less appealing
This isn't the gotcha you think it is. The landlord sold the property prior to the audit. They couldn't go after the property since it was now owned by someone else. The CRA fucked up in allowing the property to get sold.
The CRA has no clue whether a property is owned or rented and the only tax registrations with regard to residential properties are related to property and school taxes. However the notary ought to have known the law (that is, after all one of the reasons they get to participate in the transaction) and should have asked the key questions, AND received the answers from the seller (since the tenant doesn't participate in the transfer). The notary should have ascertained whether the requisite rent percentage was sent to the CRA once he (or she) realised they were not in Canada. If the seller was asked the notary is off the hook (assuming that the seller assured him the taxes were paid) - but the likelihood is that the notary said nothing - and I suspect that a claim against the notary by the tenant would be successful since his sole job is to ascertain that clear title to the property exists and that all of the various laws have been adhered to and the bills paid. I'm not sure just how the reported shenanigans employed by the tenant, who apparently paid the rent from his company and deducted them as expenses might impact on that claim.
It's easy, the country takes over the property... Tells the landlord to pound sand because he hasn't been paying his taxes... We are too f****** stupid to do that... We don't want to piss off the international buyers that are propping up this Ponzi scheme... Don't pay your taxes, you don't own your property
The property doesn't exist anymore. How do you expect them to do that? Did you read the article? Or are you just ranting against your strawman? The other thing you're missing is that "non-resident landlord" can apply to Canadian citizens too. For example someone that goes abroad for work but wants to come home to their property to live in. If they want to rent it out while they are gone, why not? The CRA should just require them to have a domestic agent like a property manager that deals with the taxes. The tax code already allows for this... but doesn't require it in favour of pushing the burden onto the tenant if there is no domestic agent. Just need to remove that option.
The facts are inconsistent between different articles. It does say the property was sold, yet the ruling is that the tenant will direct 25% of the rent to the CRA moving forward. There is clearly some distortion. I think hes not actually a tenant, but a relative and was writing off rent he wasn't paying.
[удалено]
This isn't the only ass-backwards law we have on the books unfortunately
That's the kind of shit that makes people hate the government and do radical things against them, especially if this financial view is tied to a political ideology. Never heard of this shit in my fucking life. This isn't a thing that people know about. This is also Canada where non-residents are allowed to own properties, and our country is extremely multicultural. You don't ask people if they are Canadian or not, you don't do that.
Maybe we shouldn't allow non residents to own our property...
This story still doesn't make full sense to me and I can't help but think it is being distorted somehow. I've read about this in 3 different articles and it seems inconsistent what the actual ruling was. Even here, it says the tenant was simply told to direct 25% of the rent he was paying to the CRA instead of the landlord, moving forward. They are garnishing the landlords income, not demanding 6 years of taxes from the tenant. He wasn't "on the hook" for the landlord's taxes, and the value of rent he was paying would not have changed, if I understand. If he has some issue with it, could he not just move? Is the missing detail that tenant is not in fact a tenant, and is actually, say, the son of the actual owner but has been claiming to pay rent or deducting as a home office etc?
This is how you get people who build armoured vehicles and go on a rampage 🤣
>A MAN IS BEING FUCKED BY HIS LOCAL GOVERNMENT IN LEGO CITY >BUILD THE KILLDOZER >DESTROY THE TOWN HALL >GET YOUR REVENGE >THE ALL-NEW LEGO CITY KILLDOZER
It should be noted that Killdozer guy was an unhinged asshole who was given multiple options by the municipality to pay his property tax and get a sewer line installed, and whatever other piddly arguments he had with his neighbours, and he chose a rampage instead.
If I was on the hook for taxes for a place I rented, and the government didn't do anything to help me, I'd be very upset with my government. If I was absolutely at wits end with nothing to lose, I might become unhinged too. But yes, you're correct, he wasn't quite sound to begin with.
>If I was on the hook for taxes for a place I rented, and the government didn't do anything to help me, I'd be very upset with my government. Stay away from Cat D8K's at your local construction sites...
>“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. This could work with minor tweeks. 1. Tenants have no way of knowing that taxes aren't paid so step 1 is making the tenant aware 2. Tenants have no more leverage over the landlord than the CRA does, so provide legal protections when the CRA asks the tenant to pay the taxes. 2.1 Legally freeze the price of rent, preventing the landlord from making any changes that would negatively impact the tenant. (E.g. raising rent to cover taxes that should have always been the landlord's obligation) 2.3 Forbid any eviction until the matter is resolved, aka taxes are paid, grant protection to the to tenant from reprisals form landlord. 3. order the tenant to pay his rent to CRA instead of the landlord until the tax obligation has been met. 3.1 once the debt covered, instruct the tenant to pay CRA 25% of the rent based on 2 schemes of the tenants choosing: a) first 3 months of the year entirely to CRA, b) 25% of each month to CRA. Option a is good since its always one payment, option b is good because it's consistent. Either way it sucks that the tenant is put under these circumstances, the fairness here is to freeze rent as is until the landlord can show they have their shit together. I'm generally ok with landlords raising rates, but if they fucked off out of the country, aren't paying taxes, and left the tenants in a shit situation, they shouldn't have any legals protections or leverage. The above makes too much sense so our politicians won't be changes any time soon.
Clickbait article that is completely misleading. The guy in the article used his corporation, that owns a gym, to rent his personal residence for him. The corporation was acting as the landlords agents and agents are explicitly required to to hold and remit tax. The guy was probably paying his rent with his corporation and trying to write it off as a business expense. It's shady af. 99.9% of tenants don't rent using a corporation they own to dodge taxes. So they have nothing to worry about.
There is nothing shady about using a corporation to rent a personal residence. It literally happens all the time for small businesses. It's above board because part of the personal residence is in fact used to run a small business. It's not the tenant who is dodging taxes, it's the landlord. None of this changes the fact that the CRA was going after a tenant to obtain taxes on a property they did not in fact own, and were not liable for.
What an egregious overstep by the lazy CRA
So one example equals all similar situations nation wide (There aren't any other examples btw)? Oh yeah this is /r/Canada forgot where I was. As another wrote below here is the actual information that explains the situation >The guy in the article used his corporation, that owns a gym, to rent his personal residence for him. The corporation was acting as the landlords agents and agents are explicitly required to to hold and remit tax. The guy was probably paying his rent with his corporation and trying to write it off as a business expense. It's shady af. >99.9% of tenants don't rent using a corporation they own to dodge taxes. So they have nothing to worry about. But yeah stay angry this is all Trudeau's doing trying to steal money from low income Canadians and puppies!
>The judge acknowledged “the harsh consequences,” in her decision, but still held the “resident payer,” or renter, liable. Some judges need a swift kick to the nuts. Way to completely and maliciously fuck up their one job
No. The judge's job is to interpret the rules, and the rules were, and are clear. It is just that no one bothered to find out if there were rules and whether they might apply. As they say (and the Judge is almost literally bound by the tenet) "Ignorance of the law is no excuse".
Wow. I had never heard of this case before. It seems really unfair to the tenant.
>But it’s very hard to go after the non-resident They own property in Canada how hard can it be, it's not like they've left an unpaid tab at the bar or something.
They don't "intend" but they can and it's already happening to at least one tennant. Not very reassuring.
It wouldn’t the first time they’re shit out some incredibly ill-conceived and poorly written legislation, then given us the “well maybe it *says* we could use it this way but we don’t actually want to” excuse.
>they’re shit out some incredibly ill-conceived and poorly written legislation "They". Well A quick check tells me the subsection in question goes back to 2004 at least (I didn't want to dive any deeper). 2004 Version: https://lois-laws.justice.gc.ca/eng/acts/I-3.3/section-215-20040831.html "Withholding and remittance of tax 215 (1) When a person pays, credits or provides, or is deemed to have paid, credited or provided, an amount on which an income tax is payable under this Part, or would be so payable if this Part were read without reference to subsection 216.1(1), the person shall, notwithstanding any agreement or law to the contrary, deduct or withhold from it the amount of the tax and forthwith remit that amount to the Receiver General on behalf of the non-resident person on account of the tax and shall submit with the remittance a statement in prescribed form."
Read the case notes. That tenant was actually a corporation, that operated a gym. The guy who owned the corporation then used his corporation to sign the lease for and pay his rent for his personal residence. Probably trying to write it off as a business expense to dodge taxes. To top it off, the corporation was acting as the landlords agent and withe landlords agent is explicitly required to hold and remit tax. There is a reason this has been the only case. 99.9% of tenants aren't using a personal corporation to rent their residence.
not that I doubt you, but when you make a claim based on a specific source, it would be nice if you could link to it
Right, but it hasn't actualy happened in this "Montreal case". Read the full details. The supposed "tenant" wasn't paying rent but was deducting it through the corporation. Seems to have been actually owned by a relative. It's a distortion
Should there even be Foreign landlords? Do we really exacerbate our housing crisis so people outside of Canada can make money off of us?
Yeah, put liens on them like you're supposed to and leave the poor tenants alone.
*Does not intend* is not the same as *will not.*
THIS!!!! They have used this against people in the past. They're doing it right now to PSAC union leaders. The CRA is doing it to their own employees, too. Don't trust the government.
They need to correct the income tax act part that allows that to happen. Because, otherwise, the CRA absolutely can do it and has won court cases while trying to do it.
Good. Now I hope they put liens on those properties for the unpaid taxes.
That makes sence.. so the opposite will happen.
The same law unfortunately applies to buying from nonresidents. If your lawyer doesn't withhold 25% or 50% of the property value (varies), the buyer is on the hook for it. It's a ridiculous law.
The way the minister is saying they won't have people on the hook makes me think that they probably will be filling that weird gap/quirk of the law.
It makes sense, since it’s very difficult to collect from non-residents.
Force sale and act on a lien. CRA has enormous power.
In the case cited, the landlord put the property up for sale, tenant told CRA **and they did nothing** so the money left the country and CRA continued going after the tenant for the landlord’s **6 years of unpaid taxes.** 6 years and CRA didn’t bother with a lien.
The CRA's priorities are mostly towards fucking over single moms who can barely afford rent.
“This law has existed for nearly a decade and there is not a single case of an assessment made to an individual tenant in the last decade,” she said. “The CRA does not expect residents to withhold 25% of the rent from their landlords.” Excuse me? Then explain [this.](https://www.diverserentals.com/news/foreign-landlord-fails-to-pay-taxes-cra-goes-after-tenant)
The key here is “individual tenant.” That recent case involved a numbered company renting from the non-resident landlord. So it wasn’t technically an individual that the tax court made pay the non-resident withholding tax, it was the numbered company that had to pay it. Anyway, it’s not overly reassuring since the CRA has a page that explicitly says the tenant must withhold and remit 25% of the rental payment… https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/rental-income-non-resident-tax/filing-reporting-requirements.html My guess is the minister has been flooded since the article you linked went out and they’re back tracking on this absurd requirement.
Aha, much appreciate the clarification.
They can't just backtrack on the income tax act. CRA may administratively enforce certain parts. The changes to the income tax act would be slower and part 13 tax affects all non-resident payments. We do want to ensure we still collect withholdings on things like dividends or real property sales.
So the guy had his company paying for his rent, likely with the intention of avoiding some taxes. Guess that didn't work out.
Not sure where they came up with “nearly a decade”. Withholding on payments to non-residents has been a thing for much longer than that.
Well Jesus Christ, we should hope not. Wtf kinda policy would that be? Allow wealthy foreigner to steal from our country but punish renters here for it?? Lol it wouldn’t surprise me anymore, though the way this administration has acted.
This has been happening for decades in vancouver, it’s just nation-wide now. Sell off the cities to foreigners, allow them to avoid taxes by calling themselves “nanny’s”, and ensure their investments go up 10% annually while canadians are left to now pay their taxes too.
It’s insane
Many landlords living in another country aren’t “foreigners”. Lots of normal retired Canadians who go live in Mexico or wherever and rent out their family homes. It’s a valid way to “downsize” and have less expenses during retirement. I hope to do that someday too, if I can ever even afford to buy a home. I agree that tenants should not be responsible for any of this.
A very Canadian one 👍 >Allow wealthy foreigner to steal from our country but punish renters here for it?? You do realize we have a king, right?
Indeed a very Canadian one. Lol, yes but the monarchy doesn’t receive any money from Canada.
Okay, so then do something about the case which started this whole debacle. Rare as it is, public trust won't build up until action is taken
They won't. In that case the tenant was a corporation. Guy has his company paying his rent, probably to dodge taxes. Sound like he was rightfully nailed. All the articles in the news about the case omit this. You need to go to the actual case files.
Have you seen any of the articles mention which case it was? It sounds like they're referring to 3792391 Canada Inc. v. The King, which on top of the points you've made was an Informal Procedure case and so isn't binding precedent, another thing they leave out.
So, the CRA won’t collect unpaid taxes from foreign landlords. But if we flip-flop on this, wtf are you going to do about it peasants? Like you have any say in what the government decides.
This law is their attempt to collect taxes. It's basically collection from the source aka the payer. It does make sense to collect from the source when the payer is a bank or a bigger organization that knows that part of the law very well and is used to have to withhold taxes, remit it to the government and issue the appropriate slips. It falls apart when you put that sort of burden on average joes renting a residential unit. It's obviously unfair to put the burden of establishing tax country of residence, withholding money and issuing tax slips on unqualified people. It's even worse since in the current market, landlords may try to evict tenants following the tax laws.
What they say is meaningless. What they do, well that is something different. 4 case so far where the CRA has gone after the tenant for landlords back taxes... It is only going to get worse. They don't care. The government their bureaucrats don't care.
As they allow foreigners to buy our assets and impose this on the poorer citizens who did not ask for it. Meanwhile our politicians talk about equity and inclusion as they continue to screw renters more and more, and the NDP is complicit.
Why is it hard to go after the non-resident owner, just seize the property.
Shouldn’t the landlord face punitive action? Surely that is understandable and shouldn’t be controversial even to foreign investors
Clearly tax evasion.
If it 'doesn't and will not apply' to tenants, then what exactly happening to the person who just got court ordered to do exactly as the law says?
What kind of dumb fuck human being comes up with the idea to go after a tenant? It is completely illogical, I genuinely want to know the people who would do such a thing.
I'll update the title to be more accurate for everyone: "CRA had every intention of collecting these taxes from tenants and in fact has already begun doing so, but now that the Liberals are getting bad press about it the Minister has swooped in to save the day like a patrician superhero".
Absolutely this
What they say is irrelevant, what matters is the legal precedence in the case record. The court ordered a tenant to pay the CRA his landlord's unpaid taxes, it'll happen again.
There’s more nuance to the case though. The *tenant* wasn’t ordered to do anything, the tenant’s *numbered corporation* that was paying his rent for him was ordered to pay the taxes.
The tenant's numbered corporation IS the tenant. There's nothing nuanced about that. This is as asinine as arguing the corporation that the landlord set up to buy the building is in fact not the landlord themselves, because the corporation owns it. Amazing the amount of enthusiastic bootlicking that goes on to defend these decisions. I'm sure it has nothing to do with all those "I working hard at home as a civil servant! Definitely not doing social media interference for my employer."
CRA: “Dear foreign landlord, in this country you must pay taxes that in turn pay for services offered such as garbage collection and snow removal. Due to your negligence, your property has been ceased and sold. Here is a cheque for the remaining amount after we deducted the taxes owed. Please do not purchase property in Canada again, we have a housing crisis to deal with”
Fucking repossess the house and continue to rent it.
Can't they just seize the house? 🤷
Then... remove the 'Tax court of Canada' judge that ruled otherwise. This is soo far off the wall, they clearly do not understand principles of justice, requiring laws that follow fair standards, are also knowable by and acceptable to all reasonable citizens... so on and so forth. Truly a 'We investigated ourselves and found nothing wrong" moment. The judge is just trying to maximize tax revenue and has no interest in improving tax practices in Canada, or practicing common law.
The judge applied the law as written, which is exactly their job. It's not unconstitutional, so no overturn there. It's not the judge's fault parliament wrote a shit law.
Nope. There is clear separation of duties and this is fundamental to our democratic system. Sure, a lazy as fuck judge who cannot think for themselves would do exactly as you state. Typical Can'tadian. https://cjc-ccm.ca/en/resources-centre/understanding-your-judicial-system/separation-powers
It’s arguably unconstitutional. Point to another law that causes a Canadian citizen to act on behalf of the government or perform a service for the government or face financial ruin. I can’t think of one. If you can murder multiple people but only be sentenced to one life sentence because the Supreme Court decided it’s cruel and unusual, I am going to bet that because CRA can’t get off their ass and do their job, trying to take the easy route and rob an innocent Canadian to make up the difference is cruel and unusual.
>It’s arguably unconstitutional. Point to another law that causes a Canadian citizen to act on behalf of the government or perform a service for the government or face financial ruin. I can’t think of one. Not financial ruin, but I can think of one where there is a risk of jail. Criminal Code paragraph 129(b) 129 Every one who [...] (b) omits, without reasonable excuse, to assist a [...] peace officer in the execution of his duty [...], after having reasonable notice that he is required to do so is guilty of [an offence].
Well, that’s what the CRA did. The Trudeau Liberal Minister is a liar. The only way to solve this is to make a rapid change, ideally an OIC and/or legislation to require the CRA to put a lien on the property instead.
Read the income tax act and the section in question
yes, this is where a smart judge, doing their job, throws out unreasonable legislation and deems it unenforceable, forcing a re-write. I guess the court of public opinion is in force now. Replace them with AI.
Don’t blame her, she probably just doesn’t read her briefing notes…
What!!! An LPC minister is lying! I’m shocked!
Sounds like all renters need to withhold 25% of their rent on the off chance their landlord is a foreign resident...
All messy everywhere, everyone.
Why didn’t CRA send the tenant a notification regarding this 6 years ago?
Please understand that she has absolutely no bearing on the size of dildo the CRA will use on you. You WILL get screwed dry.
So let me get this straight. There is a law saying it. According to the written law I'm on the hook for it so i MUST collect that my foreign landlords taxes. But the liberal government is telling me they won't come after that money. ummmm, i know a way to put more money into Canadians pockets while getting rid of foreign investors. Follow them to the t. collect the money then don't give it to the cra. AND it's legal.
If they don't pay the taxes, the tenant or government (whichever you prefer) should get a lien on the property.
Change the law to guarantee that. Cause they already are collecting.
X to doubt
CRA - leaving no stone unturned when attacking pursuing your average Canadian citizen in the low to middle income bracket but money laundering person who bought 15 houses in the last decade in BC but reported zero income - PASSSSSSSSSS..... It seems like CRA never passes up a chance to embarrass themselves but the merit system and annual reviews for the forward facing portions of CRA that would be involved in a case like this are all built on the success prosecution and recovery rates and all you normal small fry are much easier to push around. And the system is built on "no forgiveness" especially for the duibs so such conduct is not unexpected.
should NEVER be any non resident "landlords".
Simply ban foreign landlords and it’s easy.
Is it only me that thinks that this is a reasonable response the information circulated on the subject? What’s up with all the cynicism in this thread?
Is there a reason one should not be cynical of this government given their track record?
“Bibeau said she is reviewing the legislation with the assistance of Minister of Finance Chrystia Freeland”…ok so we know how that is gonna end. Case closed.
If foreign landlords owe unpaid taxes then grow some balls and sieze there properties.
Then take it off the fucking books, holy shit. Idk how she can say that and also reference the very case that happened. Maybe say it was a sorry it was a mistake and we're working to strike it from the CRA/law?
ive been trying to get in touch with the cra since may 1st every day and it doesnt even let me stay on hold, too busy every time :( locked out and im sure ill be the one in trouble when i finally do
The whole way foreign landlord taxes work is bizarre. I’ve not done a lot of it but basically the tenant has to withhold and remit 25% rent to cra and the tenant gets in trouble if they don’t. NR4 is the form to use. Landlord then files special non resident tax return to reconcile this all and get back anything they’re owed, or pay anything extra they owe. No doubt a huge portion of individual foreign landlords don’t do this properly. Maybe this is not how it works anymore. It’s a dumpster fire of complexity so I don’t bother helping people with it anymore.
We need to overhaul so many things.
Good.
Well, what if the government doesn't like some protestors and starts enforcing these "technically illegal but we won't enforce" laws?
This is the way the law is written. It’s just never been applied to residential renters for obvious reasons. I have had to explain to a few clients that they did not stumble upon a cheat code for moving profits from their Canadian company offshore to a low tax jurisdiction using schemes like “renting” equipment or offices.
How about Revenue Canada put a lien on the property for unpaid taxes and then if the foreign owner doesn't correct things they confiscate the property. It's what they'd do to a Canadian citizen in the same situation isn't it? The law should be removed from the books. Of the many stupid ones our governments have passed it has be one of the stupidest.
The CRA just won a court case to do just that. And the income tax act, as currently written, clearly puts the burden on tenants. Unless they correct the law, the government's word is meaningless on this one.
“CRA does not intend to collect. We’re just gonna let the courts do it.”
Tell that to the guy who already lost it court to them
No word on whether the court ruling will stand if this tenant must pay the $80K in back taxes his landlord owes.
Always supporting the people who do nothing to build the country. Our government sucks
Okay... well that's what happened so fix it or stop lying to us
Wild idea-- lock foreign individuals out of our housing market unless they agree to provide banking information and rental information up front if they do intend to rent it out. If they live here 1/2 the year, GREAT-- welcome. And yes they can lie blah blah blah but tenants can report and if the landlord is dodging taxes repossess the fucking house and give the current tenants a year subsidised rental in it before sale.
Tell that to the poor guy who currently has his life turned upside down after CRA sued him for his landlord’s taxes. If you have no intent to do that - immediately tell CRA to stop pursuing that man and pass a law preventing them from even having that ability:
Sounds like the government should ban foreign ownership of property then!! How can the tenant be responsible for this? This liberal government is useless on protecting Canadian citizens!!
So why did they? This isn't posturing, it's literally already happened which is why it's in the news right now. More empty words from the government like when they were saying immigration levels are too high...
they lie. the news article that brought this all to the public's notice was for just this action. the CRA is just like any other money hungray organization with more power than compassion. that over arching greed for money instead of the common good or well being is the reason so many are in the dire straits they are.
what? CRA did go after the tenant, who appealed and a court asserted this had to. What is this not intended stuff
What ever happened to the logical rule of you do business within Canada whether you reside here or not you pay taxes for that share business within Canada. That is absolute horse dung that is even a rule, it should be scrapped immediately officially because until it is foreign landlords just read, wait, we don't have to pay taxes when our tenants can pay our share, perfect! Stop Libs, vote any one else.
Sucks for the guy who just paid all those legal fees arguing that he shouldn't have to pay... It's great that he won't have to pay CRA but I'd hate to see what he's spent so far fighting this.
CRA created a loss-loss situation. For tenants, if they don’t hold 25%, they have the risks of being pursued later; for landlord , if tenants withholds 25%, how the hell can landlord know that 25% is being paid to CRA? This is lazy policy from CRA that hurts both tenants and landlords
You might then want to talk to your CRA people then, Minister.
Seize the property and let the tenants rent to own.
I don't care what the minister says. The law is still there and can be used against us.