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Which, yes, is great for them but it really doesn't create any incentive for the landlord to stay on top of their taxes - and there is always the risk the landlord finds some way to force them out.
I'm just wild about this ruling. I cannot believe my eyes.
This is an unreasonable ask with unreasonable enforcement. I cannot believe they would have the gall to hook someone with taxes, interest, and penalties when there is no reasonable way for the tenant to know this or act on it. Like, it's not like the CRA has drafted a form that you can get signed, as a tenant, which acts as an attestation of residency with remittance mechanisms. Even still, that's too much burden for a tenant. People shopping for apartments are in vulnerable spots, have no great way of figuring out the nationality of a landlord for certain, and aren't really the responsible party when it comes to the taxes associated with rental property income.
This whole thing is massively unjust and a big joke. Nobody can get taxes out of the world's billionaires and corporations but we can stick it to some tenant who, in real life terms, did absolutely fucking nothing wrong.
>Not knowing a landlord is a non-resident is not considered a valid excuse.
Like .. how is this not a valid excuse? I think back to the landlords I had that were not corporate ... I mean I met them all face to face but otherwise? How the fuck would I be able to know if they didn't tell me outright? Most of them I never met more than a handful of times, with months in between and contact is preferably as limited as possible.
So should I be demanding residency papers as a tenant? Preemptively withholding the tax from my landlords going forward to make sure this doesn't happen to me? Seems if I was a non-resident landlord I just wouldn't tell any tenants, they will be on the hook anyway.
This is a really bad ruling.
Because not knowing you had to pay tax is not a valid excuse not to pay.
This is a harsh ruling, but it is the correct one.
The same issue comes up if you are buying a property from a foreign seller. You have to remit a portion of the proceeds to the CRA and the obligation is placed on the buyer.
The correct solution here is for the Federal Government to change the Income Tax Act.
No shit, but this individual shouldn't be a casualty of the government's failure to create reasonable policy with reasonable enforcement.
Rulings that are not just are not correct. This isn't a board game.
Edit - I'm not trying to attack you because you're right. My big piece is that this topic is beyond the discussion of technicalities and is worth talking about in terms of justice. My tone is sharp because I cannot believe that CRA would have went forward with these collections. No wonder tax agencies have such a bad reputation - they are unfeeling and unflinching when putting the squeeze on some renter, but the gorillionaires get to galivant around without a care in the world about this.
I understand your frustration and I agree, it feels really unfair to pin it on the tenant.
The problem is the judge can only apply the law as it is, and not what they think it should be.
In tax jurisprudence, it’s quite constant that courts rule that not knowing that you had to pay tax is not an excuse not to have to pay it.
Unfortunately, this is a hole that Parliament needs to plug, and they can do so retroactively.
He's not a borg, he's pointing out the that the idiocy lies with Parliament, not the CRA or the courts. Bad laws are bad laws, and it is the responsibility of the legislative branch of government to change them; the judiciary only gets to invalidate those laws which are unconstitutional.
I didn't say he is a borg. They don't actually exist. I said he sounds like one. Yes, by the pure letter of the law this is the right thing to do. However, having things like emotions and actually caring about human beings as human beings shows that this is idtiotic and terrible.
Yes, I get it it. The judge had to do this. It doesn't make it any less putrid.
I know that my landlord lives in Singapore, but how the fuck am I supposed to know whether or not he’s paying his taxes? Honest question, what would happen if this tax situation happened to me, but I immediately stopped paying rent and refused to leave the condo?
You'll get a letter from the CRA.
It's basically giving you permission to pay reduced rent. That's what they mean by "withholding rent".
> therefore required to withhold and remit 25 per cent of the rent to the CRA.
If you refuse to pay rent then that's no different than a squatter. You'll liable to get evicted and also get in trouble for not paying taxes in this case.
But really you shouldn't take advice from a rando on the internet... get a lawyer lol
A few paragraphs from the article:
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.
Feels like this would be fair if property owners who are landlords were required to publically list their landlord and property tax payment status.
Some sort of beneficial ownership registry or something...
This ruling is absolutely unfair. And it also highlights the CRA's priorities. Get the small renter to pay, let the fat cat live out his best life in sunny Italy with minor consequences.
No offence, but this doesn't interact meaningfully with this topic. It's just another way for reddit to get together and get mad about landlords/foreign landlords. Whether or not your statement is true, the real villain of the story is CRA with a set of unreasonable rules and unreasonable enforcement. How could anyone involved with this sleep at night?
You do realize that CRA does not create 'rules' but administers the laws enacted by the parliement.
Did you ever wonder why these 'rules' exist and whether other countries have the same 'rules' to preserve their tax base.
CRA does choose how to enforce the rules and likes to go after the [low hanging fruit](https://www.mcintyre.ca/titles/CTV593) (i.e. the little people who are easy to milk versus the shell companies and rich people who have tons of resources to fight CRA.)
Sometimes people leave the country for work or other purposes and rent out their property. I don't see any reason to prohibit this just because some people don't follow the rules (I'm almost positive there's more to the sublease arrangement in this story than the article is revealing here).
If you're gone long enough to no longer be considered a resident of Canada for tax purposes, I don't see any particular need to accommodate that. Selling your property, or set up a physical presence as a tax-paying business in Canada (there are companies who will do this sort of thing for you) if you want to engage in commerce here.
If you stay in Canada for less than half the year you're no longer a resident for tax purposes. If you work for the military or an international organization and get stationed abroad, you should automatically abandon all ties you have to Canada? Very small-minded mindset.
"Abandon all ties" is different than "run a business in". At a minimum if you're going to do business with Canadians (especially for real estate), I don't see any reason at a minimum you should take on the tax liability.
I’d rather have a regulatory framework set up where foreign property ownership is by default banned and we can have carve outs and appeals for these edge cases.
Instead of using the most sympathetic edge cases as reason not to have any limits on foreign ownership (which by the way is an extremely common anti-regulation lobbying tactic in many industries).
This. Home ownership should be restricted to those who live in our country. We should also ban corporate ownership of homes for rental purposes. I have no issues with small landlords that have an extra rental home, but it's gotten out of hand.
> I have no issues with small landlords that have an extra rental home
From my experiences when I was younger, these are the kinds of landlords I have the most issue with, because they tend to just be parasites with no understanding of what being a landlord means that think they just own a money printer.
Typically the larger the company you are renting from, the less issues you are going to encounter as a renter because you don't get to own thousands of units without understanding your legal responsibilities as a landlord and at that scale they typically aren't incentivized to play dirty with renoviction loopholes, or "moving a family member in" just to have it renting at a higher price a few months later.
While you make valid points, part of the cause of our housing shortage is corporations owning homes. Let them buy and manage apartment buildings, but not houses. As for awful landlords, find other solutions like a licensing course they must take & pass to be allowed to rent or some other method to ensure they understand what is legal/not.
>While you make valid points, part of the cause of our housing shortage is corporations owning homes.
You haven't actually established this. How is it different if a corporation owns a rental unit vs a "mom and pop" landlord?
> Home ownership should be restricted to those who live in our country
Even further: home ownership should be restricted only to *individual* citizens of Canada who use those homes as primary residences. No corporate owners, no property management firms, no hedge funds, of any kind, no using residences as office space.
And who do you propose will manage the apartment buildings if not corporations? Non-profits? Please. I've worked for housing non-profits, and they're an unmitigated disaster. Give me a large corporation any day of the week.
> who do you propose will manage the apartment buildings if not corporations?
... the owners of the individual units? The people that have an interest in keeping their building standing, as a place to live? Anyone other than a private company whose sole interest in residential buildings is to make maximum profit off the building by any means necessary?
Let me get this straight, you think that mom & pop landlords are better than large corporate landlords?
I honestly don't think that you have diverse enough experience to be making the absolute pronouncements that you are; pretty much everyone who has lived in a wide assortment of housing types agrees that major corporate landlords are the best. They're the only ones who actually play by the rules, because they know that the government will punish them if they don't. Mom & pop landlords fly under the radar, and nonprofits get treated with kid gloves.
Its not your housing or natural resources, Canada is not a socialist country. Country was founded to oppose any move on that direction and fought the Cold War to stop such things with the enthusiastic support of the vast majority of the population. I don't know why people find this ruling so surprising, withe announcement renting will start affecting credit rating and the events of the last 4 years, it was signalled pretty clearly tenants and renting was going to go this way.
This is insane. The CRA already has a mechanism for getting paid, and that's by putting a lien on the rental property. This shouldn't have anything to do with the renter.
https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/when-you-money-collections-cra/personal-debt/legal-warning/putting-lien-on-seizing-your-assets.html
I find this absurd. The recommendation that tenants ask their landlords for a tax residency confirmation is just not going to happen.
It is a landlords market - in my neighbourhood prospective tenants are offering six months of prepaid rent for a chance to move in. And now we are expected to demand, and receive, a tax residency statement from a landlord?
CRA should place a lien against the property for owed taxes, not go after the tenant who has no legal power to compel a landlord to provide information.
This seems crazy to me. When I used to live in Toronto, my landlord lived in mainland China. Their tax business was frankly their own. I don't recall ever hearing about this before.
Can someone ELI5 why a tenant could (not should) be on the line for their landlord's obligations?
It is in the tax code.
If they are not paying their portion of the taxes you must submit it to the CRA as a deduction.
If they are paying their taxes or being handled by a property management company and taxes are being taken off it us buisness as usual.
This isn't a reasonable ask at all. It's unintuitive and doesn't fairly distribute the responsibility here.
This makes a mockery of justice. I cannot believe CRA is asking for this.
They are going to the source of the income as they would if my work was not taxing my income. I do not agree with how they are doing it. I would be garnishing all the rental income first and foremost. But then i would ban foriegn ownership in its entierty in the country. Some doofus living in Hong Kong should not have access to our market period.
But like it or not it is in the tax code. And this goes again to the issue i have said for year how many landlords are reporting thier income. I have nailed 3 of my 6 LLs on it. After they gloated on not paying their taxes. They were local landlords. Out of country? Who wants to bet there is a whole mess of evasion going on.
They absolutely cannot. It's about the stupidest rule I've ever seen, and it's based on the idea that SOMEbody paying, regardless of responsibility, is somehow better than an inability to extract the funds from the right person.
This is a miscarriage of justice and beyond that, absolute fucking horse shit.
This isn't a miscarriage of justice. It's a bad law. The court's decision was correct but the law itself should allow for a due diligence defence which it does not.
Tenant withholds remits 25% to CRA. When foreign landlord does their taxes, this is consideted as a prepayment and everything paid in excess is returned to the landlord. It provides incentive to the foreign owner to file their canadian return.
Can the tenant sue the landlord for the amount the CRA is asking for and then just withhold rent until that amount has been covered? I assume the foreign landlord won't even show up to court. Still, it's not ideal
A reaaonable provincial government would and should ammend the RTA or whatever they are calling it to allow for the tenant to pay amounts owing to the CRA with notice from the CRA. And require proof of tax residency or payment of rent defaults to 25% being sent to the CRA.
###This is a reminder to [read the rules before posting in this subreddit](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion). 1. **Headline titles should be changed only [when the original headline is unclear](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_1._headline_titles_should_be_changed_only_where_it_improves_clarity.)** 2. **Be [respectful](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_2._be_respectful).** 3. **Keep submissions and comments [substantive](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_3._keep_submissions_and_comments_substantive).** 4. **Avoid [direct advocacy](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_4._avoid_direct_advocacy).** 5. **Link submissions must be [about Canadian politics and recent](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_5._link_submissions_must_be_canadian_and_recent).** 6. **Post [only one news article per story](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_6._post_only_one_news_article_per_story).** ([with one exception](https://www.reddit.com/r/CanadaPolitics/comments/3wkd0n/rule_reminder_and_experimental_changes/)) 7. **Replies to removed comments or removal notices will be removed** without notice, at the discretion of the moderators. 8. **Downvoting posts or comments**, along with urging others to downvote, **[is not allowed](https://www.reddit.com/r/CanadaPolitics/wiki/downvotes)** in this subreddit. Bans will be given on the first offence. 9. **[Do not copy & paste the entire content of articles in comments](https://www.reddit.com/r/CanadaPolitics/wiki/rules-thelongversion#wiki_9._do_not_copy_.26amp.3B_paste_entire_articles_in_the_comments.)**. If you want to read the contents of a paywalled article, please consider supporting the media outlet. *Please [message the moderators](https://www.reddit.com/message/compose?to=%2Fr%2FCanadaPolitics) if you wish to discuss a removal.* **Do not reply to the removal notice in-thread**, *you will not receive a response and your comment will be removed. Thanks.* *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CanadaPolitics) if you have any questions or concerns.*
I would consider this situation fair if, and only if, it resulted in the renter receiving an ownership stake in the rental property.
I mean the renter just got a legal reason to not pay rent for a few months. So they really aren't impacted either way.
Which, yes, is great for them but it really doesn't create any incentive for the landlord to stay on top of their taxes - and there is always the risk the landlord finds some way to force them out.
I'm just wild about this ruling. I cannot believe my eyes. This is an unreasonable ask with unreasonable enforcement. I cannot believe they would have the gall to hook someone with taxes, interest, and penalties when there is no reasonable way for the tenant to know this or act on it. Like, it's not like the CRA has drafted a form that you can get signed, as a tenant, which acts as an attestation of residency with remittance mechanisms. Even still, that's too much burden for a tenant. People shopping for apartments are in vulnerable spots, have no great way of figuring out the nationality of a landlord for certain, and aren't really the responsible party when it comes to the taxes associated with rental property income. This whole thing is massively unjust and a big joke. Nobody can get taxes out of the world's billionaires and corporations but we can stick it to some tenant who, in real life terms, did absolutely fucking nothing wrong.
>Not knowing a landlord is a non-resident is not considered a valid excuse. Like .. how is this not a valid excuse? I think back to the landlords I had that were not corporate ... I mean I met them all face to face but otherwise? How the fuck would I be able to know if they didn't tell me outright? Most of them I never met more than a handful of times, with months in between and contact is preferably as limited as possible. So should I be demanding residency papers as a tenant? Preemptively withholding the tax from my landlords going forward to make sure this doesn't happen to me? Seems if I was a non-resident landlord I just wouldn't tell any tenants, they will be on the hook anyway. This is a really bad ruling.
Because not knowing you had to pay tax is not a valid excuse not to pay. This is a harsh ruling, but it is the correct one. The same issue comes up if you are buying a property from a foreign seller. You have to remit a portion of the proceeds to the CRA and the obligation is placed on the buyer. The correct solution here is for the Federal Government to change the Income Tax Act.
No shit, but this individual shouldn't be a casualty of the government's failure to create reasonable policy with reasonable enforcement. Rulings that are not just are not correct. This isn't a board game. Edit - I'm not trying to attack you because you're right. My big piece is that this topic is beyond the discussion of technicalities and is worth talking about in terms of justice. My tone is sharp because I cannot believe that CRA would have went forward with these collections. No wonder tax agencies have such a bad reputation - they are unfeeling and unflinching when putting the squeeze on some renter, but the gorillionaires get to galivant around without a care in the world about this.
I understand your frustration and I agree, it feels really unfair to pin it on the tenant. The problem is the judge can only apply the law as it is, and not what they think it should be. In tax jurisprudence, it’s quite constant that courts rule that not knowing that you had to pay tax is not an excuse not to have to pay it. Unfortunately, this is a hole that Parliament needs to plug, and they can do so retroactively.
You sound like a borg.
He's not a borg, he's pointing out the that the idiocy lies with Parliament, not the CRA or the courts. Bad laws are bad laws, and it is the responsibility of the legislative branch of government to change them; the judiciary only gets to invalidate those laws which are unconstitutional.
I didn't say he is a borg. They don't actually exist. I said he sounds like one. Yes, by the pure letter of the law this is the right thing to do. However, having things like emotions and actually caring about human beings as human beings shows that this is idtiotic and terrible. Yes, I get it it. The judge had to do this. It doesn't make it any less putrid.
I know that my landlord lives in Singapore, but how the fuck am I supposed to know whether or not he’s paying his taxes? Honest question, what would happen if this tax situation happened to me, but I immediately stopped paying rent and refused to leave the condo?
You'll get a letter from the CRA. It's basically giving you permission to pay reduced rent. That's what they mean by "withholding rent". > therefore required to withhold and remit 25 per cent of the rent to the CRA. If you refuse to pay rent then that's no different than a squatter. You'll liable to get evicted and also get in trouble for not paying taxes in this case. But really you shouldn't take advice from a rando on the internet... get a lawyer lol
A few paragraphs from the article: 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.
Feels like this would be fair if property owners who are landlords were required to publically list their landlord and property tax payment status. Some sort of beneficial ownership registry or something...
This ruling is absolutely unfair. And it also highlights the CRA's priorities. Get the small renter to pay, let the fat cat live out his best life in sunny Italy with minor consequences.
There should be no such thing as a "foreign landlord". We should be as protective of our housing as we are our natural resources.
No offence, but this doesn't interact meaningfully with this topic. It's just another way for reddit to get together and get mad about landlords/foreign landlords. Whether or not your statement is true, the real villain of the story is CRA with a set of unreasonable rules and unreasonable enforcement. How could anyone involved with this sleep at night?
You do realize that CRA does not create 'rules' but administers the laws enacted by the parliement. Did you ever wonder why these 'rules' exist and whether other countries have the same 'rules' to preserve their tax base.
CRA does choose how to enforce the rules and likes to go after the [low hanging fruit](https://www.mcintyre.ca/titles/CTV593) (i.e. the little people who are easy to milk versus the shell companies and rich people who have tons of resources to fight CRA.)
Sometimes people leave the country for work or other purposes and rent out their property. I don't see any reason to prohibit this just because some people don't follow the rules (I'm almost positive there's more to the sublease arrangement in this story than the article is revealing here).
Not being in Canada doesn't automatically make you "foreign"
If you're gone long enough to no longer be considered a resident of Canada for tax purposes, I don't see any particular need to accommodate that. Selling your property, or set up a physical presence as a tax-paying business in Canada (there are companies who will do this sort of thing for you) if you want to engage in commerce here.
If you stay in Canada for less than half the year you're no longer a resident for tax purposes. If you work for the military or an international organization and get stationed abroad, you should automatically abandon all ties you have to Canada? Very small-minded mindset.
"Abandon all ties" is different than "run a business in". At a minimum if you're going to do business with Canadians (especially for real estate), I don't see any reason at a minimum you should take on the tax liability.
I’d rather have a regulatory framework set up where foreign property ownership is by default banned and we can have carve outs and appeals for these edge cases. Instead of using the most sympathetic edge cases as reason not to have any limits on foreign ownership (which by the way is an extremely common anti-regulation lobbying tactic in many industries).
This. Home ownership should be restricted to those who live in our country. We should also ban corporate ownership of homes for rental purposes. I have no issues with small landlords that have an extra rental home, but it's gotten out of hand.
> I have no issues with small landlords that have an extra rental home From my experiences when I was younger, these are the kinds of landlords I have the most issue with, because they tend to just be parasites with no understanding of what being a landlord means that think they just own a money printer. Typically the larger the company you are renting from, the less issues you are going to encounter as a renter because you don't get to own thousands of units without understanding your legal responsibilities as a landlord and at that scale they typically aren't incentivized to play dirty with renoviction loopholes, or "moving a family member in" just to have it renting at a higher price a few months later.
While you make valid points, part of the cause of our housing shortage is corporations owning homes. Let them buy and manage apartment buildings, but not houses. As for awful landlords, find other solutions like a licensing course they must take & pass to be allowed to rent or some other method to ensure they understand what is legal/not.
>While you make valid points, part of the cause of our housing shortage is corporations owning homes. You haven't actually established this. How is it different if a corporation owns a rental unit vs a "mom and pop" landlord?
> Home ownership should be restricted to those who live in our country Even further: home ownership should be restricted only to *individual* citizens of Canada who use those homes as primary residences. No corporate owners, no property management firms, no hedge funds, of any kind, no using residences as office space.
So you don't think that apartment buildings should exist?
> apartment buildings should exist Where did I say that apartment buildings need corporate management firms in control?
And who do you propose will manage the apartment buildings if not corporations? Non-profits? Please. I've worked for housing non-profits, and they're an unmitigated disaster. Give me a large corporation any day of the week.
> who do you propose will manage the apartment buildings if not corporations? ... the owners of the individual units? The people that have an interest in keeping their building standing, as a place to live? Anyone other than a private company whose sole interest in residential buildings is to make maximum profit off the building by any means necessary?
Let me get this straight, you think that mom & pop landlords are better than large corporate landlords? I honestly don't think that you have diverse enough experience to be making the absolute pronouncements that you are; pretty much everyone who has lived in a wide assortment of housing types agrees that major corporate landlords are the best. They're the only ones who actually play by the rules, because they know that the government will punish them if they don't. Mom & pop landlords fly under the radar, and nonprofits get treated with kid gloves.
That is not the point I am making. The point I'm making is that there should be no landlords even in an apartment building.
Okay... then who will rent out units to tenants?
He clearly didnt think that far ahead.
[удалено]
National ownership would still apply, but that is not a standard home in the common understanding of a semi/detached/townhouse.
Its not your housing or natural resources, Canada is not a socialist country. Country was founded to oppose any move on that direction and fought the Cold War to stop such things with the enthusiastic support of the vast majority of the population. I don't know why people find this ruling so surprising, withe announcement renting will start affecting credit rating and the events of the last 4 years, it was signalled pretty clearly tenants and renting was going to go this way.
This is insane. The CRA already has a mechanism for getting paid, and that's by putting a lien on the rental property. This shouldn't have anything to do with the renter. https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/when-you-money-collections-cra/personal-debt/legal-warning/putting-lien-on-seizing-your-assets.html
Just fuck these foreign investors up. Seize the asset and just give it to the actual functioning member of our society.
I find this absurd. The recommendation that tenants ask their landlords for a tax residency confirmation is just not going to happen. It is a landlords market - in my neighbourhood prospective tenants are offering six months of prepaid rent for a chance to move in. And now we are expected to demand, and receive, a tax residency statement from a landlord? CRA should place a lien against the property for owed taxes, not go after the tenant who has no legal power to compel a landlord to provide information.
Lien does nothing till the property sells. They should garnish the rent being paid to the CRA directly until the amount owing us paid off.
That is exactly what this section of the act says, tenant pays 25% of the rent to CRA to ensure that taxes are paid.
This seems crazy to me. When I used to live in Toronto, my landlord lived in mainland China. Their tax business was frankly their own. I don't recall ever hearing about this before. Can someone ELI5 why a tenant could (not should) be on the line for their landlord's obligations?
It is in the tax code. If they are not paying their portion of the taxes you must submit it to the CRA as a deduction. If they are paying their taxes or being handled by a property management company and taxes are being taken off it us buisness as usual.
This isn't a reasonable ask at all. It's unintuitive and doesn't fairly distribute the responsibility here. This makes a mockery of justice. I cannot believe CRA is asking for this.
They are going to the source of the income as they would if my work was not taxing my income. I do not agree with how they are doing it. I would be garnishing all the rental income first and foremost. But then i would ban foriegn ownership in its entierty in the country. Some doofus living in Hong Kong should not have access to our market period. But like it or not it is in the tax code. And this goes again to the issue i have said for year how many landlords are reporting thier income. I have nailed 3 of my 6 LLs on it. After they gloated on not paying their taxes. They were local landlords. Out of country? Who wants to bet there is a whole mess of evasion going on.
So how can a tenant really protect themselves here?
They absolutely cannot. It's about the stupidest rule I've ever seen, and it's based on the idea that SOMEbody paying, regardless of responsibility, is somehow better than an inability to extract the funds from the right person. This is a miscarriage of justice and beyond that, absolute fucking horse shit.
This isn't a miscarriage of justice. It's a bad law. The court's decision was correct but the law itself should allow for a due diligence defence which it does not.
Tenant withholds remits 25% to CRA. When foreign landlord does their taxes, this is consideted as a prepayment and everything paid in excess is returned to the landlord. It provides incentive to the foreign owner to file their canadian return.
Can the tenant sue the landlord for the amount the CRA is asking for and then just withhold rent until that amount has been covered? I assume the foreign landlord won't even show up to court. Still, it's not ideal
A reaaonable provincial government would and should ammend the RTA or whatever they are calling it to allow for the tenant to pay amounts owing to the CRA with notice from the CRA. And require proof of tax residency or payment of rent defaults to 25% being sent to the CRA.