Best Consumer Protection Lawyers in Waterloo, ON

Tenant's Obligation to remit non-resident Landlord's tax: 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 said 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. It’s well known that non-resident owners have long had to pay withholding taxes on properties they either sell or rent out. However, few renters and few realtors are aware that if taxes don’t get paid, the tenant can be liable. Thank you for reading our post.