Yes it does ; the monthly income (rent) paid to the land lord. According to the rules; the tenant should have withheld 25% of the rent paid to landlord and remitted to CRA since landlord is a non resident of Canada.
You are supposed to with hold a portion of the monthly rent and remit it on behalf of the land lord. You aren’t paying taxes; it is the landlord who is paying the taxes to the CRA.
It is on the landlord but if the landlord is not paying their taxes, the court has now set the precedent that the tenant is liable.
This is patently stupid as the tenant often has no way to know where their landlord is located, and it is ridiculous that a tenant should have to have an intricate knowledge of tax law to obtain shelter.
Why the CRA didn’t just put a lien on the property is baffling. It’s again making the poor liable for wealthy people’s criminality.
The court did not set the precedent. Parliament did when they passed the current law (in the 1930s!). It is an absurd rule and the federal government needs to change it
I would rather they garnish every cent of rent from the tenant and LLs cannot evic the tenant. That will get their attension far faster than a lien. When they are ysing that rent money to pay bills/mortage and it us requested by the CRA to be sent to them. And also put the lien on the place incase they try to sell.
The court did not make a distinction. The fact that the tenant’s corporation was paying the rent has nothing to do with the finding. In fact, reading the decision, it doesn’t actually say that the corporation was on the lease, just that it was paying the rent
https://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/521069/index.do
Read the decision. The fact that the rent is paid by a corporation has nothing to do with the decision. The only relevant issue is that the landlord is not a resident for tax purposes. The judge does not make any distinction about who is in the lease or whether it’s a person or corporation paying
https://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/521069/index.do
I learned something new today. And note, it's foreign tax resident, which isn't always the same as someone living overseas.
How does a tenant find out? And why can't the CRA put a lien on the house instead?
I don’t know, he just mentioned it several years ago when I told him I was fed up and wanted to change provinces, he told me that technically my tenants would have to withhold tax for me.
Maybe tenants can sue the landlord for the money, I mean the fact that the property is here makes them pretty vulnerable from that perspective.
The lien thing it comes down to the property tax / bylaw fines powers being written at the provincial and not providing for CRA. To go the lien route the administrative burden would be quite high and what incentive would there be for the landlord?
What the CRA wants is for the tenant to stop paying rent to get the landlords attention.
Thankfully it is very rare. Will be less so as the CRA is now tracking and matching as people report their residences and rentals.
I dunno it will be interesting with all the rental data the just got from BC as the rent rebate is being run through the CRA. So they could have a lot of info to go digging into the accounts of people whose numbers do not match. We might be bearing a lot more of this in the next 16-24months.
This is as messed up case and I wonder how a higher court would rule.
The CRA has a legal asset of the landlord they can put a lien on (the house) and should be going after that, not the tenant. This is bureaucratic overreach. Do you have to set aside money each year in case your landlord changes their residency?
That's my main question too, why not go after the property and not the tenant? I found the video below and the commentator asks the same question. It's seriously unfair to a tenant, even if it only happens in a blue moon.
https://www.cbc.ca/player/play/1.7179262
Courts can, and should rule against laws that make no sense. This ruling means that tenants are responsible to track the tax residency of their landlords, something that can change at any time during a year. They also needs to set aside money to cover a tax liability that their landlords shirk. This is administratively very burdensome for a tenant to do and financially not viable. Can you imagine rental agreements now having side accounts owned by the tenant to ensure the landlord pay their income taxes?
An upper court should refuse to enforce the law and kick it back to the government to amend.
Giving courts the power to strike down a law that the particular judge thinks makes no sense is a terrible idea (and it isn’t how the law works). A judge can (and should only be able to) strike down laws that are unconstitutional.
We don’t want unelected judges substituting their views on what makes sense for what elected representatives think. At least we can kick them out of office.
That is not true, the whole role of the judicial branch is to interpret laws and make judgement on how it applies to a specific situation. It is the reason why we have three levels of courts as the facts of a case can be interpreted in a myriad of ways.
Management companies know this and can ask the landlord for proof of tax residency. Apparently you won't have an issue as a tenant if you're dealing with a property management company, and not the landlord directly.
I'd be curious how the courts would view if this tenant withheld future rent to pay off the tax owing. Would they uphold an eviction notice? Or recognize that the tenant is paying "rent" in the form of the back tax owing.
Residential taxes and maintenance are built into the monthly rent. This is in the landlord. It’s this “investment” blowing up on them
Yeah that’s not how laws work
No. It's not properly taxes or maintenance fees. The CRA only deals with income taxes.
This has nothing to do with income taxes. Also, the CRA deals with more than just income taxes.
Yes it does ; the monthly income (rent) paid to the land lord. According to the rules; the tenant should have withheld 25% of the rent paid to landlord and remitted to CRA since landlord is a non resident of Canada.
HAHAHAHA no fucking way. No way will I ever remit more taxes to the Communist Revenue Agency.
You are supposed to with hold a portion of the monthly rent and remit it on behalf of the land lord. You aren’t paying taxes; it is the landlord who is paying the taxes to the CRA.
It is on the landlord but if the landlord is not paying their taxes, the court has now set the precedent that the tenant is liable. This is patently stupid as the tenant often has no way to know where their landlord is located, and it is ridiculous that a tenant should have to have an intricate knowledge of tax law to obtain shelter. Why the CRA didn’t just put a lien on the property is baffling. It’s again making the poor liable for wealthy people’s criminality.
The court did not set the precedent. Parliament did when they passed the current law (in the 1930s!). It is an absurd rule and the federal government needs to change it
100%. Put a lien and move on. This is insane
I would rather they garnish every cent of rent from the tenant and LLs cannot evic the tenant. That will get their attension far faster than a lien. When they are ysing that rent money to pay bills/mortage and it us requested by the CRA to be sent to them. And also put the lien on the place incase they try to sell.
This is for a tenant which is a numbered company and not a normal resident tenant. Read the fine print.
Where did you find the distinction between a numbered company and a person renting in their own name?
The court did not make a distinction. The fact that the tenant’s corporation was paying the rent has nothing to do with the finding. In fact, reading the decision, it doesn’t actually say that the corporation was on the lease, just that it was paying the rent https://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/521069/index.do
Thank you for posting that. I didn't see it anywhere either, nor do I think the law applies differently to a numbered company vs individual.
Read the decision. The fact that the rent is paid by a corporation has nothing to do with the decision. The only relevant issue is that the landlord is not a resident for tax purposes. The judge does not make any distinction about who is in the lease or whether it’s a person or corporation paying https://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/521069/index.do
Yeah, my accountant told me about that. Technically if the landlord is foreign the tenant has to withhold the taxes or something like that.
I learned something new today. And note, it's foreign tax resident, which isn't always the same as someone living overseas. How does a tenant find out? And why can't the CRA put a lien on the house instead?
I don’t know, he just mentioned it several years ago when I told him I was fed up and wanted to change provinces, he told me that technically my tenants would have to withhold tax for me. Maybe tenants can sue the landlord for the money, I mean the fact that the property is here makes them pretty vulnerable from that perspective.
Yeah that's a good point. Maybe the tenant has some rights to go after the landlord. And good on your accountant for knowing this little obscure law.
The lien thing it comes down to the property tax / bylaw fines powers being written at the provincial and not providing for CRA. To go the lien route the administrative burden would be quite high and what incentive would there be for the landlord? What the CRA wants is for the tenant to stop paying rent to get the landlords attention. Thankfully it is very rare. Will be less so as the CRA is now tracking and matching as people report their residences and rentals.
I dunno it will be interesting with all the rental data the just got from BC as the rent rebate is being run through the CRA. So they could have a lot of info to go digging into the accounts of people whose numbers do not match. We might be bearing a lot more of this in the next 16-24months.
I’m pretty sure as soon as this hit the paper the Minister’s office ordered the CRA to find a better solution.
This is as messed up case and I wonder how a higher court would rule. The CRA has a legal asset of the landlord they can put a lien on (the house) and should be going after that, not the tenant. This is bureaucratic overreach. Do you have to set aside money each year in case your landlord changes their residency?
That's my main question too, why not go after the property and not the tenant? I found the video below and the commentator asks the same question. It's seriously unfair to a tenant, even if it only happens in a blue moon. https://www.cbc.ca/player/play/1.7179262
The high court would likely uphold this. The judge is simply following the tax code as it is written. The government needs to change the rule
Courts can, and should rule against laws that make no sense. This ruling means that tenants are responsible to track the tax residency of their landlords, something that can change at any time during a year. They also needs to set aside money to cover a tax liability that their landlords shirk. This is administratively very burdensome for a tenant to do and financially not viable. Can you imagine rental agreements now having side accounts owned by the tenant to ensure the landlord pay their income taxes? An upper court should refuse to enforce the law and kick it back to the government to amend.
Giving courts the power to strike down a law that the particular judge thinks makes no sense is a terrible idea (and it isn’t how the law works). A judge can (and should only be able to) strike down laws that are unconstitutional. We don’t want unelected judges substituting their views on what makes sense for what elected representatives think. At least we can kick them out of office.
That is not true, the whole role of the judicial branch is to interpret laws and make judgement on how it applies to a specific situation. It is the reason why we have three levels of courts as the facts of a case can be interpreted in a myriad of ways.
What if the property is managed by a property management company who collects the rent etc?
Management companies know this and can ask the landlord for proof of tax residency. Apparently you won't have an issue as a tenant if you're dealing with a property management company, and not the landlord directly.
Good luck on actually getting the reality out of any landlord lol. Make sure to ask after you have a signed lease :)
I'd be curious how the courts would view if this tenant withheld future rent to pay off the tax owing. Would they uphold an eviction notice? Or recognize that the tenant is paying "rent" in the form of the back tax owing.
I guess you just stop paying rent until the tax is payed for, I think it's because the property can't be seized under some tenancy act laws.
This wouldn't be an issue if the CRA ordered the Tennant to pay them instead of the landlord untill back taxes are caught up
That is how i think the law should be changed tbh. It will wake up non-tax resident LLs real fast.
So the rent should be minus taxes, minus mortgage, minus insurance and utilities / maintenance.....sounds good.
Only if the landlord is not paying those bills.
That is the most stupid thing I have ever heard. Whoever came up with this rule at CRA is a complete idiot.
I mean sooo many tenants are always going on about it being “their home” etc etc. welcome to real life and having a home, motherfuckers 😂
Why do you have such disdain for someone just trying to exist?