Amounts paid to non-residents for rent on Canadian property are generally subject to withholding tax. However, recent legislative amendments provide limited relief.

When withholding may not apply

• Rent paid for a residential property in which an individual resides
• Rent paid for the residence of a deceased individual, within 36 months of death, by a graduated rate estate

CRA has indicated it is administering this change even though the legislation has not yet been formally passed.

Important limitation

If the exception applies, the non-resident landlord remains responsible for remitting and reporting the tax, unless an agent already does so.

Action: Do not assume all non-resident rent is exempt—most situations still require withholding.