Income tax on rent, worked example, in Canada

Taxation Researcher | July 13, 2019

Non-resident couple´s joint monthly rental income1 US$1,500 US$6,000 US$12,000
Annual Rental Income US$18,000 US$72,000 US$144,000
= Taxable Income US$18,000 US$72,000 US$144,000
Income Tax2
Flat Tax 25% 4,500 18,000 36,000
Annual Income Tax Due 4,500 18,000 36,000
Tax Due as % of Gross Income 25.00% 25.00% 25.00%

Notes


1 The property is jointly owned by husband and wife.

2 Exchange rate used: 1.00 US$ = 1.13 CAD

3 Gross rental income earned by nonresident individuals is generally subject to 25% withholding tax.
Nonresidents may elect to file an income tax return. By so electing, he will then be taxed on the net rental income at the federal tax rates.