I am a non-resident who owns a rental property in Ontario — what taxes apply to my rental income?

Non-residents who earn rental income from Canadian property are subject to Part XIII withholding tax under the federal Income Tax Act. The standard rate is 25% of gross rent, withheld and remitted to CRA each month by the Canadian tenant or a property manager — the obligation falls on the person paying the rent, not you.

However, you can elect under Part I (the regular income tax rules) to file a Canadian tax return and pay tax only on your net rental income (after expenses). This election — made by filing a return and notifying CRA — often results in a lower tax bill than the flat 25% withholding, especially if you have mortgage interest, property taxes, insurance, and other deductions.

If you choose the Part I election you must file a non-resident return and pay any balance owing by April 30 of the following year (or June 15 if self-employed, though interest accrues from April 30). You also need to register with CRA as a non-resident landlord and obtain a non-resident withholding number. Ontario land transfer tax and the municipal non-resident speculation tax may apply separately to purchases.