HUNTER’S HINTS
Withhholding Tax
By Hunter Boucher, Director of Operations, LandlordBC
Over the past few months there has been significant media coverage of something called withholding tax and how it can affect residential tenancies. But what is withholding tax?
Withholding tax is a Canada Revenue Agency’s (CRA) requirement whereby a payer must deduct tax from payments made to a recipient. This tax is withheld at the source of income, such as salaries, wages, interest, dividends, or royalties, and, in the case of residential tenancies, payments of rent and/or fees before the recipient receives the funds. In residential tenancies, withholding tax is set to 25 per cent and is intended to ensure tax compliance, aid in collecting tax revenue, and prevent tax evasion by non-residents or businesses that do not otherwise have a taxable presence in Canada.
The media coverage we have seen over the past few months has focused on whether tenants are responsible for withholding this amount and remitting it to CRA and furthermore, what consequences exist if this does not happen. And while the short answer is that tenants are not expected to withhold this tax, it is much more complicated than that.
The primary point of confusion is that by law and quite pointedly on the official CRA site it states, “If you receive rental income from real or immovable property in Canada, the payer (such as the
...THERE WAS A RECENT CASE WHERE A MONTREAL-BASED TENANT WAS ORDERED TO PAY SIX YEARS OF THIS TAX WITH INTEREST ON BEHALF OF A NON-RESIDENT LANDLORD WHOM
CRA WAS UNABLE TO COLLECT FROM.
tenant) or agent (such as the property manager) must withhold non-resident tax of 25 per cent on the gross rental income paid or credited to you.” To compound this issue, there was a recent case where a Montreal-based tenant was ordered to pay six years of this tax with interest on behalf of a non-resident landlord whom CRA was unable to collect from.
It is clear that requiring residential tenants to withhold taxes for non-resident landlords would complicate rental arrangements and introduce challenges for both parties involved. It would put an administrative burden on tenants and potentially mean every landlord would need to prove residency within Canada.
So, what is protecting tenants from needing to withhold and remit this tax? A history of non-enforcement on the part of CRA and Canada’s Minister of National Revenue Marie-Claude Bibeau. In a statement made on X (formally Twitter) Minister Bebeau stated that the recent case “was an extremely rare situation” and that “there is not a single instance of an assessment made to an individual tenant in the last decade”. Minister Bibeau went on to say, “I am working with my colleague, the Minister of Finance, to provide absolute clarity on the law”.
While tenants are not expected to withhold and remit this tax, that same leniency is not afforded to property managers or agents of non-resident landlords. Requirements and procedures for dealing with the withholding tax should be built into management agreements. A property manager’s job is to withhold 25 per cent of the gross income and submit it to the CRA. In most cases this 25 per cent is higher than the real tax liability of the non-resident landlord. The 25 per cent can, by application to CRA, be reduced from Gross to 25 per cent of net income after expenses when the non-resident and their property manager co-sign a NR6 form.
In conclusion, the recent spotlight on withholding tax and its impacts for residential tenancies underscores the complexity and potential challenges inherent in its application. While the law mandates a 25 per cent withholding tax on rental income for non-resident landlords, the responsibility for withholding and remitting this tax is not placed on tenants, but rather on property managers or agents. However, the recent case of a Montreal tenant ordered to pay six years of tax on behalf of a non-resident landlord has raised concerns and highlighted the need for clarity and consistent enforcement from the Canada Revenue Agency (CRA).
Minister Marie-Claude Bibeau’s assurance of addressing these issues and providing clarity on the law is crucial in ensuring fair and effective implementation. Moving forward, it is imperative for property managers, tenants, and landlords to understand their respective roles and obligations regarding withholding tax, and for proper procedures to be established to mitigate confusion.
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Coinamatic Canada Inc.
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Vancouver Rent It
Andy Yuen (604) 408-0008
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Seva Roberts (604) 537-4399
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Jade Yu
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Anthony Fong virani.ca
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Bill Mitsui billmitsui.com
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Alysha Bacus (778) 957-7376 wesgroup.ca
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Paula Owen (250) 359-5021
Westwynd Real Estate Services Ltd.
Jeff Brown (604) 944-8917
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Juhan Lee (604) 762-4200 wynnrealty.ca
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CBRE Ltd.
Lance Coulson (604) 662-5141 nationalapartmentgroupbc.ca
Goodman Commercial Inc.
Mark Goodman (604) 714-4790
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Larry Berisoff (250) 878-7417 syberrealty.com
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Coinamatic Canada Inc.
Lyle Silverstein (604) 270-8441 coinamatic.com
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Catherine Maxwell (604) 838-3385 trailappliances.com
APPRAISAL - INSURANCE
Normac
Nicole Daniels (604) 221-8258 normac.ca
ASBESTOS REMOVAL
BMS Plumbing & Mechanical Systems Ltd.
Tamara Merchan (604) 253-9330 bmsmechanical.com
Macdonald Commercial
R.E.S. Ltd.
Dan Schulz (778) 999-5758 bcapartmentinsider.com
McEvay Blair Multifamily Group
James Blair (604) 790-7089 mbmultifamily.com
Multifamily Real Estate Services
Seth Baker (778) 686-3330 multifamily.ca
Pospischil Realty Group
Adam Pospischil (604) 263-1000 pospischilrealty.com
REDEVELOPMENT
MANAGEMENT
IDS Group
David Adelberg (604) 245-9898 idsgroup.ca
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BMS Plumbing & Mechanical Systems Ltd.
Tamara Merchan (604) 253-9330 bmsmechanical.com
KS Maintenance Ltd.
Teresa Cheung (604) 339-8223
ks-propertyservices.com
RE-PIPING
BMS Plumbing & Mechanical Systems Ltd.
Tamara Merchan (604) 253-9330 bmsmechanical.com
Cambridge Plumbing Systems Ltd.
John Jurinak (604) 872-2561
cambridgeplumbing.com
Manna Plumbing Ltd.
Chris Kobilke (604) 710-3908 mannaplumbing.com
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Lambert Plumbing and Heating Ltd.
Youhann Semov (604) 734-0890 lambertplumbing.ca
CLEANING - CARPET & UPHOLSTERY
Island Carpet & Upholstrey
Cleaning Inc.
Ron Gould (250) 590-5060 islandcarpetcleaning.ca
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BMS Plumbing & Mechanical Systems Ltd.
Tamara Merchan (604) 253-9330 bmsmechanical.com
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RentCheck Credit Bureau
Brenda Maxwell (800) 661-7312
rentcheckcorp.com
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RentCheck Credit Bureau
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FirstOnSite Restoration Ltd.
Amy Barilla (236) 335-0499 firstonsite.ca
Incredible Restorations
Mikael Gatfi (604) 639-0990 incrediblerestorations.com
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Bond Roofing
Daniel Fajfar (604) 375-2100 bondroofing.ca
Cambie Roofing Contractors
Paul Skujins (604) 261-1111 cambieroofing.com
Read Jones Christoffersen Ltd.
Jason Guldin (250) 213-2520 rjc.ca
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Cambie Roofing Contractors
Paul Skujins (604) 261-1111 cambieroofing.com
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Telus Communications Inc.
Sarah Ballantyne (250) 310-3343 telus.com
Vandelta Communication Systems Ltd.(VDC)
Christopher Rae (604) 732-8686 vandelta.com
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Pendo
Jodelene Weir (604) 398-4030 pen.do/partners/landlordbc
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Rona
Nathalie Meloche 514-668-0051 rona.ca
Super Save Group of Companies
Danielle Johannes (604) 533-4423 supersave.ca
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Callaway Plumbing and Drains Ltd.
Brett Callaway (250) 216-7159 callawayplumbing.ca
Victoria Drains
Dave Lloyd (250) 818-1609 victoriadrains.com
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Rushworth Electrical Services Inc.
Dustin Rushworth (250) 361-1231 rushworthelectric.ca
ENERGY EFFICIENCY & CONSERVATION
BC Hydro
The Home Depot Canada
Michael Lirangi (416) 571-8940
homedepot.ca/pro
TELECOMMUNICATIONS
Telus Communications Inc
Sarah Ballantyne (250) 310-3343 telus.com
UTILITIES/ NATURAL GAS
Absolute Energy
Kirby Morrow (604) 315-2058 absolute-energy.ca
UTILITY SUB-METERING
Enerpro Systems Corp.
Andrew Davidson (604) 982-9155 enerprosystems.com
WASTE/ RECYCLING
Super Save Group of Companies
Danielle Johannes (604) 533-4423
supersave.ca
Waste Connections of Canada Inc.
Tomas Hansen (604) 834-7578
WasteConnectionsCanada.com
WATERPROOFING
Cambie Roofing Contractors Paul Skujins (604) 261-1111 cambieroofing.com
WATERPROOFING
Read Jones Christoffersen Ltd.
Jason Guldin (250) 213-2520 rjc.ca
WINDOW - REPLACEMENT/ INSTALLATION/RENOVATION
A1 Windows Roque Datuin (604) 777-8000 a1windows.ca
Centra Windows
Andrew Anderson (888) 534-3333 centrawindows.com
Retro Teck Window Wilfred Prevot (604) 291-6751 retrowindow.com
FRESCo Building Efficiency
Jordan Fisher (778) 783-0315
frescoltd.com
Yardi Breeze Premier Jasmin Rodas (800) 866-1124 yardibreeze.ca
ENGINEERS
FRESCo Building Efficiency
Jordan Fisher (778) 783-0315 frescoltd.com
Read Jones Christoffersen Ltd.
Jason Guldin (250) 213-2520 rjc.ca
Anna Garnett (778) 846-9125 ctiservices.ca ASSOCIATE MEMBERS/CORPORATE SUPPLIERS - VANCOUVER ISLAND
Lyle Silverstein (604) 270-8441 coinamatic.com
Brenda Maxwell (800) 661-7312
rentcheckcorp.com
To learn more about energy savings opportunities go to bchydro.com
FortisBC Energy Inc.
Mel Tugade (888) 224-2710 fortisbc.com
EVICTION SERVICES
Canadian Tenant Inspection Services Ltd.
FIRE PROTECTION & MONITORING
Telus Communications Inc.
Sarah Ballantyne (250) 310-3343 telus.com
FIRE PROTECTION, MONITORING & EQUIPMENT
Rushworth Electrical Services Inc.
Dustin Rushworth (250) 361-1231
rushworthelectric.ca
Vancouver Fire and Radius Security
Angela Nottingham (604) 232-3473 vanfire.com
FOOD WASTE DISPOSER
Super Save Group of Companies
Danielle Johannes (604) 533-4423
supersave.ca
GAS SERVICE
Absolute Energy
Kirby Morrow (604) 315-2058
absolute-energy.ca
Callaway Plumbing and Drains Ltd.
Brett Callaway (250) 216-7159
callawayplumbing.ca
Heating Fuels
Columbia Fuels
Nathan Dorie (877) 500-4328 columbiafuels.com
INSPECTIONS-TENANCY COMPLIANCE
Canadian Tenant Inspection Services Ltd.
Anna Garnett (778) 846-9125
ctiservices.ca
INSURANCE
AC&D Insurance Services Ltd.
Robert ten Vaanholt (604) 985-0581
acdinsurance.com
BFL Canada Risk and Insurance Services Inc.
Stacey Wilson (778) 374-4125
bflcanada.ca/real-estate
Capri CMW Insurance Services Ltd.
Danielle Russell (604) 294-3301 capricmw.ca
Megson FitzPatrick Insurance
Mike Nichol (250) 519-2300
megsonfitzpatrick.com
INTERNET LISTING
SERVICES
Yardi Breeze Premier
Jasmin Rodas (800) 866-1124
yardibreeze.ca
LEGAL SERVICES
Haddock & Company
Jessica McNeal (604) 983-6670 haddock-co.ca
Lesperance Mendes
Alex Chang (604) 685-3567 lmlaw.ca
Refresh Law
Oscar Miklos (604) 800-8096 refreshlaw.ca
MEDIA
MediaEdge Communications
Dan Gnocato (604) 549-4521 mediaedge.ca
MORTGAGE FINANCING
Citifund Capital Corporation
Derek Townsend (604) 683-2518 citifund.com
CMHC
Eric Bond (604) 737-4161 cmhc.ca
ONLINE PAYMENT SERVICE
Yardi Breeze Premier
Jasmin Rodas (800) 866-1124 yardibreeze.ca
PAINT SALES
Cloverdale Paint
Dave Picariello (604) 551-8083 cloverdalepaint.com
PIPE LINING/ RE-PIPING
CuraFlo of Canada Ltd.
Randy Christie (604) 298-7278 curaflo.com
PLUMBING/HEATING/ BOILERS
BMS Plumbing & Mechanical Systems Ltd.
Tamara Merchan (604) 253-9330 bmsmechanical.com
Callaway Plumbing and Drains Ltd.
Brett Callaway (250) 216-7159 callawayplumbing.ca
Cambridge Plumbing Systems Ltd.
John Jurinak (604) 872-2561 cambridgeplumbing.com
CuraFlo of Canada Ltd.
Randy Christie (604) 298-7278 curaflo.com
PRINTING
Citywide Printing Ltd.
Gordon Li (604) 254-7187 citywideprint.com
PROPANE
Columbia Fuels
Nathan Dorie (877) 500-4328 columbiafuels.com
PROPERTY MANAGEMENT
460 Property Management Inc.
Carol Buck (250) 591-4603 460pm.com
Abingdon Moore Realty
Marilyn Koehle (778) 421-8797
Advanced Property Management Inc.
Lorri Fugle (250) 338-2472 advancedpm.ca
AQP Management
Andrew Bekes (778) 966-7277
BentallGreenOak (Canada)
Limited Partnership
Candace Le Roux (604) 646-2814 bentallgreenoak.com
Brown Bros Agencies Ltd.
Drew Storey (250) 385-8771 brownbros.com
Century 21 Queenswood
Chris Markham (250) 477-1100 century21queenswood.ca
Cherry Creek Property
Services Ltd.
Val Ketel (250) 427-7411 ccps.email
Clover Residential Ltd.
Alana Fitzpatrick (250) 532-2635 duttons.com
Colliers
Grant Evans (250) 414-8373 collierscanada.com
Colyvan Pacific Property Management
Jodi Levesque (250) 754-4001 colyvanpacific.com
Complete Residential
Property Management
Dennie Linkert (250) 370-7093 completeresidential.com
Cornerstone Properties Ltd.
Jason Middleton (250) 475-2005 cornerstoneproperties.bc.ca
Coronet Realty Ltd.
Aaron Best (604) 298-3235 coronetrealtyltd.com
Countrywide Village Realty Ltd.
Simranjeet Kaur (250) 749-6660
Devon Properties Ltd.
David Craig (250) 595-7000 devonproperties.com
DFH Real Estate Ltd.
Lisa Clark (250) 477-7291
Equitex Realty Ltd.
Joe Bellows (250) 386-6071 equitex.ca
Greenaway Realty Ltd.
Kirsten Greenaway (250) 216-3188 greenawayrealty.com
Hugh & McKinnon Realty Ltd.
Scott Higgins (604) 531-1909 hughmckinnon.com
Hume Investments Ltd.
Sally McIntosh (604) 980-9304 humeinvestments.com
Lannon Creek Holdings Ltd.
Dave McClimon (250) 744-0394
Oakwood Property Management
Carol Dobell (250) 704-4391 oakwoodproperties.ca
Pemberton Holmes
Property Management
Claire Flewelling-Wyatt (250) 478-9141 thepropertymanagers.ca
Proline Management Ltd.
Adam Taylor (250) 475-6440 prolinemanagement.com
Quality Property
Management Real Estate
Services Ltd.
Marianne Miller (778) 878-7304 bcpropertyspecialist.com
Richmond Property Group Ltd.
Jean McKay (250) 388-9920 richmondproperty.ca
Royal LePage Nanaimo Realty
Brenda Gilroy (250) 760-2234 royallepagenanaimo.ca
TPM Properties
Debbie Hunt (250) 383-7663
Tribe Management Inc.
Scott Ullrich (604) 202-5500
Widsten Property Management
Steve Widsten (250) 753-8200 islandrent.com
REAL ESTATE SALES
CBRE Limited
Lance Coulson (604) 662-5141 nationalapartmentgroupbc.ca
Colliers
Grant Evans (250) 414-8373 collierscanada.com
Goodman Commercial Inc.
Mark Goodman (604) 714-4790 goodmanreport.com
McEvay Blair Multifamily Group
James Blair (604) 790-7089 mbmultifamily.com
RENOVATION & REPAIRS
BMS Plumbing & Mechanical Systems Ltd.
Tamara Merchan (604) 253-9330 bmsmechanical.com
RE-PIPING
BMS Plumbing & Mechanical Systems Ltd.
Tamara Merchan (604) 253-9330 bmsmechanical.com
Callaway Plumbing and Drains Ltd.
Brett Callaway (250) 216-7159 callawayplumbing.ca
Cambridge Plumbing Systems Ltd.
John Jurinak (604) 872-2561 cambridgeplumbing.com
RESTORATION
FirstOnSite Restoration Ltd.
Amy Barilla (236) 335-0499 firstonsite.ca
ROOFING
Read Jones Christoffersen Ltd.
Jason Guldin (250) 213-2520 rjc.ca
SECURITY & INTERCOM SYSTEMS
Telus Communications Inc.
Sarah Ballantyne (250) 310-3343 telus.com
SOFTWARE - PROPERTY MANAGEMENT
Pendo
Jodelene Weir (604) 398-4030 pen.do/partners/landlordbc
SUPPLIES - HARDWARE, BUILDING, MAINTENANCE
Rona
Nathalie Meloche 514-668-0051 rona.ca
Super Save Group of Companies
Danielle Johannes (604) 533-4423 supersave.ca
The Home Depot Canada
Michael Lirangi (416) 571-8940 homedepot.ca/pro
TELECOMMUNICATIONS
Telus Communications Inc.
Sarah Ballantyne (250) 310-3343 telus.com
UTILITIES/ NATURAL GAS
Absolute Energy
Kirby Morrow (604) 315-2058
absolute-energy.ca
UTILITY SUB-METERING
Enerpro Systems Corp.
Andrew Davidson (604) 982-9155 enerprosystems.com
WASTE/ RECYCLING
Super Save Group of Companies
Danielle Johannes (604) 533-4423 supersave.ca
WATERPROOFING
Read Jones Christoffersen Ltd.
Jason Guldin (250) 213-2520 rjc.ca
WINDOWREPLACEMENT/ INSTALLATION/ RENOVATION
A1 Windows
Roque Datuin (604) 777-8000 a1windows.ca
Centra Windows
Andrew Anderson (888) 534-3333 centrawindows.com
Retro Teck Window
Wilfred Prevot (604) 291-6751 retrowindow.com
Colwood & Sechelt development sites Townhome, rental or condo projects
3 development sites with plans in place. Can be purchasesd separately.
Call for details
James Lodge
1116 West 12th Avenue, Vancouver
Vacant possession for 8 of the 11 units! 6,235 SF lot just 1.5 blocks from VGH.
List $5,700,000 (est. 4.7% cap)
Vancouver C-2 zoned warehouse 57 Lakewood Drive, Vancouver
C-2 zoned warehouse / development site. 24,142 SF corner lot. Build up to 3.0 FSR.
List $12,700,000
Yorkshire Apartments 2336 York Avenue, Vancouver
35-suite building – steps to Kits Beach. Attractive assumable CMHC financing. Ocean & water views.
List $19,800,000 (3.9% cap)
Gow Block 3589 Commercial Street, Vancouver
Mixed-use 6-unit heritage building in the Cedar Cottage neighbourhood. Completely rebuilt in 2010.
List $4,600,000 (3.8% cap)
Kits Point waterfront dev site 1000 Cypress Street, Vancouver
14,256 SF Kits Point DP-approved waterfront development site with direct beach access.
List $14,500,000
357 West 4th Street North Vancouver
12-suite apartment building in Lower Lonsdale neighbourhood. Residential Level 5 OCP.
List $6,900,000 (3.5% cap)
Georgian House 5450 Vine Street, Vancouver
12-storey concrete rental tower. 69 suites in the heart of Kerrisdale. Infill development potential.
List $42,000,000
Bayside Towers 1846 Nelson Street, Vancouver
43-suite 10-storey concrete rental tower in West End – west of Denman neighbourhood. Views. Sold $20,450,000
4790 mark@goodmanreport.com
Brackett Direct 604 714 4778 ian@goodmanreport.com