{"id":1163,"date":"2015-02-19T04:03:00","date_gmt":"2015-02-19T04:03:00","guid":{"rendered":"http:\/\/capitaltaxltd.com\/canada\/?p=1163"},"modified":"2021-02-25T16:59:20","modified_gmt":"2021-02-25T16:59:20","slug":"how-to-minimize-taxes-on-your-canadian-rental-income-while-living-abroad","status":"publish","type":"post","link":"https:\/\/www.capitaltaxltd.com\/canada\/2015\/02\/19\/how-to-minimize-taxes-on-your-canadian-rental-income-while-living-abroad\/","title":{"rendered":"How To Minimize Taxes On Your Canadian Rental Income While Living Abroad"},"content":{"rendered":"<div style=\"padding-bottom:20px; padding-top:10px;\" class=\"hupso-share-buttons\"><!-- Hupso Share Buttons - https:\/\/www.hupso.com\/share\/ --><a class=\"hupso_counters\" href=\"https:\/\/www.hupso.com\/share\/\"><img decoding=\"async\" src=\"https:\/\/static.hupso.com\/share\/buttons\/share-small.png\" style=\"border:0px; padding-top:2px; float:left;\" alt=\"Share Button\"\/><\/a><script type=\"text\/javascript\">var hupso_services_c=new Array();var hupso_counters_lang = \"en_US\";var hupso_image_folder_url = \"\";var hupso_url_c=\"\";var hupso_title_c=\"How%20To%20Minimize%20Taxes%20On%20Your%20Canadian%20Rental%20Income%20While%20Living%20Abroad\";<\/script><script type=\"text\/javascript\" src=\"https:\/\/static.hupso.com\/share\/js\/counters.js\"><\/script><!-- Hupso Share Buttons --><\/div><p lang=\"en-US\"><span style=\"color: #000000;\">If you own real estate in Canada, renting the properties out can be an effective way to make some money while you\u2019re living abroad. The problem is the Canadian tax code can be a little strict when you\u2019re a non-resident earning Canadian rental income. The good news is with some simple planning and paperwork you can minimize the taxes on your rental income so more of it stays in your pocket.<\/span><\/p>\n<p lang=\"en-US\"><span style=\"color: #000000;\"><b>Managing rental property<\/b><\/span><\/p>\n<p lang=\"en-US\">\u00a0<span style=\"color: #000000;\">When you\u2019re collecting Canadian rental income as a non-resident, you need an agent or representative in the country to collect the money on your behalf. If this is all you set up, under the Canadian tax code 25% of your gross rental income would need to go to the Canadian Revenue Agency each month. Gross rental income is the money you take in from your tenants without any sort of adjustment from your monthly expenses.<\/span><\/p>\n<p lang=\"en-US\">\u00a0<span style=\"color: #000000; line-height: 1.5em;\">Instead, if you file Form NR6 at the start of the year, your agent would only need to send off 25% of your net rental income. This is your gross monthly rental income minus your monthly expenses. With this approach, your agent will pay significantly less to the CRA each month so more money will go to you.<\/span><\/p>\n<p lang=\"en-US\"><span style=\"color: #000000;\"><b>Tax benefit of planning<\/b><\/span><\/p>\n<p lang=\"en-US\">\u00a0<span style=\"color: #000000;\">Let\u2019s say you\u2019re renting your Canadian house for $2,000 a month while you\u2019re living abroad and you have $1,600 worth of monthly expenses for maintaining the property. Your gross income is $2,000 a month while your net income is $400 a month ($2,000 &#8211; $1,600).<\/span><\/p>\n<p lang=\"en-US\">\u00a0<span style=\"color: #000000;\">Without filing Form NR6, your representative would have to submit $500 a month to the CRA (2,000 x .25) and would pay $6,000 throughout the year. By filing Form NR6, your representative would only have to submit $100 a month ($400x.25) and would pay only $1,200 throughout the year. You\u2019d avoid $4,800 in unnecessary tax payment by filing this form.<\/span><\/p>\n<p lang=\"en-US\"><span style=\"color: #000000;\"><b>Preparing Form NR6<\/b><\/span><\/p>\n<p lang=\"en-US\"><span style=\"color: #000000;\">You need to file Form NR6 at the start of your tax year for the rental property. This would be the first month you start renting your property or January for properties that were rented the year before.<\/span><\/p>\n<p lang=\"en-US\">\u00a0<span style=\"color: #000000;\">On this form, you need to fill out your property\u2019s address, your estimated gross rental income, your rental expenses, and your net income after expenses. If you own multiple rental properties, you\u2019ll need to record this for each one. After you fill in this information, both you and your agent\/representative need to sign the form. \u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you own real estate in Canada, renting the properties out can be an effective way to make some money while you\u2019re living abroad. The problem is the Canadian tax code can be a little strict when you\u2019re a non-resident earning Canadian rental income. The good news is with some simple planning and paperwork you [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1219,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":{"0":"post-1163","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-articles","8":"entry"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v15.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<meta name=\"description\" content=\"If you own real estate in Canada, renting the properties out can be an effective way to make some money while you\u2019re living abroad.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.capitaltaxltd.com\/canada\/2015\/02\/19\/how-to-minimize-taxes-on-your-canadian-rental-income-while-living-abroad\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"International Tax Services - 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