TaxBreaks

Episode 033 – Tax Considerations For Foreigners Buying Canadian Real Estate

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

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

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

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

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

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

            • Happy listening!

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